Factory gate prices have hit their highest level in 16 years due to rocketing petrol and food costs, according to figures released by the Office for National Statistics.

The organisation revealed that annual output price inflation hit 4.5% in November, up from 3.8% the previous month, as a result of high costs of raw materials.

The price rises mean costs will inevitably be passed on to consumers, who have already faced increased food, fuel and borrowing costs in recent months.

There are also fears that such price pressures could send inflation soaring and scupper hopes of any more interest rate cuts.

The last time factory gate inflation was this high was back in August 1991, when it hit 5.2%.