UK output prices increased in August on oil prices, official data showed Friday. Meanwhile, prices paid by companies to buy materials and fuels recorded the fastest monthly growth since June 2008.

Reflecting price rises of other manufactured, petroleum and chemical products, output prices rose 0.2% month-on-month in August, the same as in July, a report from the Office for National Statistics revealed. The expected growth rate was 0.3%. Price increases in oil and chemical products were partially offset by a drop in tobacco and alcohol product prices.

Annual decline in output prices was the smallest since May with prices falling 0.4% in August, smaller than July's 1.3% annual drop and the 0.5% decrease expected by economists.

Core output price inflation that excludes food, beverages, tobacco and petroleum accelerated to 0.7% annually from just 0.1% recorded in July. At the same time, core monthly inflation halved to 0.2% from 0.4%. While, annual core inflation came in smaller than the 0.8% rise expected, monthly inflation matched economists' expectations.

Input prices grew 2.2% on a monthly basis in August, reversing a 1.1% fall in July. Input prices increased more than the expected growth of 1%. August's growth was the biggest since June 2008.

Meanwhile, the input price index for materials and fuels purchased by manufacturing industry slipped 7.5% in August from the prior year compared to a larger decline of 12.2% in July and a consensus forecast for a 8.4% drop.

The ONS is set to issue the CPI data for August on September 15. The rise is factory-gate prices suggest an upward pressure on consumer prices. Consumer prices are forecast to rise 0.3% month-on-month in August, after staying flat in July. Annual inflation is expected to slow to 1.6% from July's 1.8%.

The Bank of England said in its latest quarterly Inflation Report that the CPI inflation is more likely to fall below 1% in autumn, requiring an open letter from the Governor to the Chancellor.

On September 10, the central bank had maintained its interest rate for the sixth consecutive month at 0.5% and also voted to continue the GBP 175 billion asset purchase programme using central bank reserves.