The Bank of England's concerns over price pressures were fuelled yesterday as a key indicator of the price of goods leaving factories showed that British manufacturers had increased prices at a record rate last month.

The key gauge of the measure of prices charged by industry in a monthly survey from the Chartered Institute for Purchasing and Supply (CIPS) rose to 59.9 last month, the highest since the figures were first collected in 1999. Any figure above 50 indicates increasing pricing pressures.

Manufacturers also reported a leap in prices for raw materials, components and fuel. The input price index rose to 72.2, from 69.7 in January, the highest figure recorded since 2004.

Paul Dales, of Capital Economics, said that the figures would deal a blow to the Bank's Monetary Policy Committee's hopes that an economic slowdown would keep inflation at bay by showing that manufacturers were still increasing prices at record rates.

There was a ray of hope in the overall index, which rose to 51.3 in February, up from 50.7 in January. However, the signs for the health of the sector were ominous, with new orders falling for the second month in a row.

The new orders index was 49.9 last month, while the export orders index was 49.1, up slightly from 48.4 in January.

Karen Ward, UK economist at HSBC, said that the increased costs were a “one-off” because of the spiralling cost of oil, and should not affect the medium-term outlook for inflation. “These cost pressures are first-round effects and, in theory, not something for the Bank to worry about. A one-off rise in oil prices should lead to a one-off shift in manufacturing prices to maintain manufacturers' margins,” she said.

However, if wages were increased to compensate for the price increase, then prices could rise again, continuing the threat of inflation, she added.

Roy Aliffe, director of professional practice at CIPS, said: “Although there was a slight improvement in the performance of the UK manufacturing sector, there are ongoing signs suggesting that it is still suffering from economic uncertainties.”

Manufacturing activity in the eurozone eased in February, but prices at the factory gate increased at their fastest pace in nearly a year. The RBS/NTC Eurozone Manufacturing PMI slipped to 52.3, its lowest since October, but the output price index rose to 56.4, the highest since last March.

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