Rise in industry's input costs fuel inflation worries

The producer price index figure has just been released and it shows that in January British manufacturers' input costs rose at their fastest annual rate in more than two years.

This was led by increases in the cost of oil and commodity prices imported from abroad.

The index is a monthly survey that measures the price changes of goods bought and sold by UK manufacturers - it is especially important in the current environment as a strong number will certainly put pressure on inflation.

Philip Shaw, chief economist at Investec says price increases will affect the Bank of England's decisions on interest rates.