UK inflation looms as costs soar to 25-year high

Manufacturers sounded the alarm on inflation today as costs spiralled at the fastest pace for 25 years last month.

The UK’s industrial sector is, so far, weathering the burden as production also rose at the fastest pace for nearly three years in January, according to the Chartered Institute of Procurement and Supply.

Firms put the inflation pressure down to the post-Brexit slump in the pound, as well as higher prices from their own suppliers thanks to the rising cost of raw materials such as oil, plastics and steel.

Cips chief executive David Noble said: “Manufacturers were no longer able to absorb these costs as output prices grew at one of the fastest rates since records began. Consumers will soon wonder whether these rising costs will have an impact on their daily life.”

The data come on the eve of the latest Bank of England quarterly forecasts in which the central bank is poised to raise growth and inflation estimates. The Bank is expected to hold borrowing costs at their record low 0.25% but strike a more hawkish tone and stress that interest rates could move in either direction.