British manufacturers' raw material costs rose more than expected last month and at their sharpest annual rate since October 2008 as the cost of crude oil surged, official data showed on Friday. The Office for National Statistics said producer input prices jumped 2.0 percent on the month to take the annual rate of increase to 8.4 percent, well above expectations for 6.3 percent. Price pressures have been rising in the last few months, pushing consumer price inflation almost a percentage point above the Bank of England's 2 percent target. However, policymakers remain concerned that the spare capacity created by the recession will bear down on inflation over the medium term, Reuters reported. The main upward pressure on input prices came from a 70.6 percent annual jump in crude oil prices (the highest increase since July 2008). Factory gate inflation also rose more than expected. Output prices rose 0.4 percent on the month and 3.8 percent on the year, the highest annual rate since December 2008. Analysts had predicted an annual gain of 3.7 percent.
