The price of goods used in manufacturing products rose at their fastest rate since 1999 in March as a result of higher energy and raw material costs, a survey has revealed.

The Chartered Institute of Purchasing and Supply's input price index rose to 76.3 in March from 72.7, taking the rate of inflation to its highest point since 1995.

The output price index only rose slightly from 59.9 to 60.6, indicating that many manufacturers are currently absorbing the increase in cost themselves.

The rise in prices will be of concern to the Bank of England, which is reluctant to cut interest rates while inflation remains above the government's target of 2.0%.