The prices of goods leaving Britain's factories rose in January from December but the annual rate slowed, official data showed on Friday, reinforcing expectations that British inflation was retreating.

Producer prices gained 0.5 percent last month from December, as alcohol, petroleum products and clothes rose, the Office for National Statistics said in a statement. That was the largest monthly increase since April 2011.

Compared with the level a year earlier, January producer prices rose by 4.1 percent, which was the lowest annual rate since November 2010 and marked a sharp slowdown from 4.8 percent in December.

Market expectations had been for factory prices to rise by 0.1 percent on the month and 3.7 percent year-on-year, according to analysts polled by Dow Jones Newswires.

"The monthly rise in prices did not prevent a further fall in output price inflation, from 4.8 percent in December to 4.1 percent," said Samuel Tombs, UK economist at research consultancy Capital Economics.

He added: "On balance, there's little in today's figures to contradict our view that consumer price inflation will fall sharply this year."

Recent official data showed that annual British inflation fell in December by the biggest amount in more than two years -- to 4.2 percent from 4.8 percent in November.