London: British factory gate inflation unexpectedly turned positive for the first time in five months, with almost all sectors contributing to the rise, official data showed on Friday.

The Office for National Statistics said non-seasonally adjusted output prices rose 0.5 per cent on the month in September, taking the annual rate of inflation to 0.4 per cent.

That was both the highest reading since April and followed a -0.3 per cent rate in August.

Analysts had predicted factory gate inflation would stay negative at a rate of 0.1 per cent and said price pressures could start rising again soon.

"You could see inflation start to pick up again in the early part of next year," said George Buckley, chief UK economist at Deutsche Bank.

While most sectors had a positive impact on output prices over the month, the ONS said the biggest effect came from petroleum product prices, which were driven up by a rise in duty at the start of September.

Annual input price inflation was also the least negative since April, falling by 0.5 per cent on the month and by 6.5 per cent on the year.

Trade gap

Separately, the ONS said Britain's trade gap with the rest of the world narrowed slightly to £6.240 billion (Dh36.6 billion) in August from £6.431 billion in July. That was the smallest trade gap since June 2006, but was not significantly lower than the deficits in recent months.

Manufacturers face pressure to raise prices to protect margins as commodity costs fluctuate.

A.G. Barr Plc, the Scottish maker of Irn-Bru soda and Tizer soft drinks, said that first-half profit rose 16 per cent on higher sales of its brands.

"Operating margins held up despite continued pressure on input costs," the company said in a statement.

"We anticipate continued volatility in our material costs."

While petroleum products rose in September, a 4.4 percent drop in the cost of crude oil helped push down raw material prices. They fell by 0.5 percent, the statistics office said.

The UK economy shrank 0.6 per cent in the second quarter, less than previously estimated, and the National Institute of Economics and Social Research says gross domestic product stopped falling in the three months through September. Services expanded at the fastest pace in two years while manufacturing fell to the lowest level since 1992, reports showed this week.