Manufacturers charged customers more for their goods last month after feeling the pinch of higher prices for gas and crude oil.

National Statistics (NS) said factory gate prices rose by 0.3 per cent between February and March.

The increase was largely in line with economists' predictions and was driven mainly by higher fees for scrap metal.

But the problems facing British industry in protecting its profit margins from the rapid rise in raw material costs were visible in the annual growth rates.

In the year to March, manufacturers were able to put up their prices by just 2.5 per cent compared with a much larger increase in their overheads of 13.1 per cent, NS said. Yesterday's data showed that electricity prices continued to be a major headache for companies, rising 56.5 per cent over the past year and the highest rate of growth since records began in 1991.

Gas prices also spiked last month while oil is 29.4 per cent more expensive now than it was last year.

Economists said a 1.8 per cent rise in the cost of crude between February and March accounted for half of the rise in all raw material costs.

HSBC economist John Butler said the data showed "manufacturers have absorbed much of the pressure on costs in margins".

But hefty rises in factory gate prices and raw material inflation a year earlier meant the annual growth rate of both measures fell between February and March, the NS said.

The rate of increase in overheads fell from 14.9 per cent in the year to February, while factory prices eased from 2.9 per cent.

"Looking ahead, input prices might be boosted if the recent rise in the oil price is sustained, or if wholesale gas prices rise again," said Jonathan Loynes at Capital Economics. "But it is reassuring that core output price inflation, despite March's rise, remains below its average of 2.1 percent last year."

The figures did little to alter expectations that the Bank of England will leave interest rates on hold at 4.5 per cent - especially as the NS pointed out that gas prices remain volatile.

Another factor likely to keep policymakers in wait-and-see mode is evidence of the housing market picking up.

As reported elsewhere in today's Birmingham Post, separate government figures yesterday showed that house price inflation slowed in February to 3.6 per cent from 4.3 per cent in February, contrasting with recent surveys from major lenders.