The price of goods leaving factory gates rose at its highest rate for six months in November, fuelled by the higher cost of oil.

The Office for National Statistics reported that the annual rate of factory gate inflation in November was 2.9 per cent, the highest rise since June and up from 2.8 per cent in October.

The ONS said the increase was largely because of a rise in the price of petrol products, although this was offset by a fall in motor vehicle prices.

There were, however, signs that the pressure on industry from oil costs could be easing, with the price of crude oil rising by 4.9 per cent between October and November, from 5.4 per cent the time before.

Nevertheless, oil prices were still 47.4 per cent higher than last November.

The output price index for manufactured goods, excluding food, beverages, tobacco and petroleum rose by 0.8 per cent last month compared to one per cent in October.

In a separate survey, the ONS said a decline in corporate profitability in 1999 meant UK companies were no longer the second most profitable in the world.

UK firms have slipped to fifth in the table, said ONS.

The international profitability of UK manufacturers fell significantly, while profitability in the service sector fell back slightly.

The ONS blamed the slide on rising input prices and reduced export margins.

It means, on a measure of profitability of all companies, the UK lags behind Israel, Norway and Singapore, with Finland topping the table.

Britain's lowest paid workers are in line for an inflation-busting rise.

Trade and Industry Secretary Stephen Byers paved the way for the minimum wage increase when his department gave evidence to the Low Pay Commission.

The evidence will result in basic pay rising from £3.70 to £4 an hour.