UK factory gate prices were a little higher than expected in February as the index showed its biggest annual gain since December 2008.

The cost of goods at the factory gates was 4.1% higher than in February 2009, a tad above the 4% annual gain expected by economists, and up from a 3.8% year on year gain in January.

Prices rose 0.3% during the month after advancing 0.4% in January. A report from the Office for National Statistics said price rises in chemical products, tobacco and alcohol products and other manufactured products were largely responsible for the gain.

Petroleum products showed a 20% year on year increase while tobacco and alcohol goods rose 3.8%. Electrical and optical goods showed a 5.1% increase over the 12 month period.

The core producer price index, which strips out the effects of food, beverages, tobacco and petroleum, also rose 0.3% in February after climbing 0.4% in January. The annual gain broadened to 2.9% from 2.6% in January.

The input price index for materials and fuels purchased by manufacturing industry climbed 6.9% in the year to February and rose 0.1% in February alone.

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