National Statistics said that factories’ input costs rose last month by 3.4 per cent, their fastest pace in four and a half years. Analysts had forecast a 1.6 per cent figure.

"The rise mainly reflected price rises in crude oil and impored parts and equipment," National Statistics said. Crude prices roses by 14.8 per cent over the month.

However, the prices charged by manufacturers to customers dipped by 0.1 per cent, a second successive month of decline. The January fall reflected a dips in alcohol and petrol prices, as supermarkets engaged in a forecourt price war.

The data comes amid a period of continuing disagreement between official and industry reports over the health of manufacturing. While National Statistics last week reported that factories were in better health than it had thought, the latest Confederation of British Industry survey has highlighted renewed threats to the sector.

The statistics provoked a mixed response in the City, where some analysts thought they lowered the chance of a rise in interest rates.

“It still seems as though manufacturers are struggling to
pass through their higher costs,” James Knightley, the ING
economist, said.

“This may ease some concerns about [inflation] accelerating."

However, Howard Archer, the Global Insight economist, pointed to the "sharp rise" in input costs as evidence of inflationary pressures.

With a separate report, from Incomes Data Services, showing an increase to 3.2 per cent in annual wage inflation last month, from 3.0 per cent in December, "we believe that underlying inflationary pressures are significant, and that the eventual next move in interest rates is more likely to be up than down", he said.

John Butler, at HSBC, also pointed to the importance of salary rises.

"If wage growth accelerates over the crucial January-to-April pay settlement period the [Bank of England] may shift back to the issue of spare capacity and inflation rather than house price crash," he said.

"That would be associated with the possibility of further rate hikes."

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