Signs of inflationary pressure building in the UK economy emerged last night after figures showed a sharp jump in factory gate prices.
With manufacturers more willing to pass on higher energy costs, the Office for National Statistics (ONS) said output prices rose 0.7 per cent between August and last month and by 3.3 per cent in the year to last month.
The figures were stronger than expected and caused analysts to speculate that interest rates were likely to remain stationary at 4.5 per cent when the Bank of England meets next month.
Investec chief economist Philip Shaw said his forecast for inflation next week pointed towards a figure of 2.7 per cent for September.
Inflation rose further above the bank's two per cent target to 2.4 per cent in August.
Mr Shaw said: ''The concerns over inflation will probably see the bank adopt a cautious approach to monetary policy over the next few months. Rates are likely to remain at 4.5 per cent until early next year."
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereComments are closed on this article