Manufacturers surprised the City yesterday after output rose by 0.2 per cent in January.

According to the Office for National Statistics (ONS), there were no major falls in manufacturing production during a month in which the makers of food, tobacco and paper saw significant growth.

The figures were stronger than expected by analysts concerned that a stronger manufacturing sector may lead the Bank of England to decide that inflationary pressures are rising.

Although the Bank's monetary policy committee is not expected to raise interest rates today, many in the City think an increase from the current level of 4.75 per cent will take place later this year.

Steve Radley, economist with employers' organisation the EEF, said the figures showed the manufacturing sector was in better health than is often portrayed.

But he said: "With the prospect of even higher energy costs and problems for exporters from a stronger pound, there is no room for complacency."

Unseasonably mild temperatures in January meant the overall index of production fell 0.2 per cent as utilities scaled back output in the face of lower demand.

The ONS also announced that the UK's trade gap in goods worsened during the first month of the year to £5.2bn from a revised deficit of £4.9bn in December.