The Office for National Statistics (ONS) released new figures on Monday showing a sharp increase in the price of manufactured goods in March.

The ONS said that unadjusted output prices increased 0.9 per cent on the month in March and took the annual rate of inflation to 6.2 per cent. The figure represents the highest annual rate of inflation since May 1991.

According to the new figures, annual input price inflation reached its highest level since records began 1986, rising from 19.9 per cent in February to 20.4 per cent in March.

The ONS will release the figures for consumer price inflation in March on Tuesday. The figures will be watched carefully by the Bank of England who are weary that excessive interest rate cuts, while easing the credit crunch, could cause high inflation.