The prices of goods leaving UK factories rose at a faster pace than expected in December, figures show.

Figures from the Office for National Statistics (ONS) showed UK producer prices rose by 0.5% last month.

It took the annual rate of output price inflation to 3.5%, which is the highest rate since January 2009.

Input prices, the cost of materials bought by producers, rose at an annual rate of 6.9%, the fastest pace since November 2008.

However, analysts said the increases were unlikely to signal wider inflationary problems.

“We remain dubious that manufacturers will be ably to significantly lift their prices over the coming months given substantial excess capacity and elevated competition amid still challenging conditions,” said Howard Archer, chief UK and European economist at IHS Global Insight.

“While the manufacturing sector appears to be recovering to some extent after a largely dismal 2009, it is still hardly racing ahead.”

Source the BBC