Europe's largest maker of polythene film, bags and sacks highlighted the current squeeze on manufacturers after warning on profits.

British Polythene Industries (BPI) said interim results would be "somewhat behind" last year as the firm struggles with soaring energy and raw material costs.

Official figures recently showed manufacturers' input costs rising at their highest rate since records began in 1986. Costs have surged 20.6% in the year to March, driven by a 62.5% jump in crude oil prices.

While falling demand for BPI's manufacturing and construction materials was offset by increased sales of agricultural products, its results suffered due to delays in passing on the higher raw materials costs to customers.

BPI has been plagued by unprecedented hikes in the oil-derived by-products it uses to make polythene and last week raised its own prices by up to £80 a tonne.

Although the price of its raw materials has since steadied in Western Europe, the pound's recent fall against the euro has caused higher costs nonetheless.

BPI, which is based in Greenock, near Glasgow, also warned of rising gas and electricity prices this summer in a period when it would usually benefit from lower costs.

The group did however offer some causes for optimism in the trading update.

It added that its UK manufacturing operations had recently begun winning back work from European rivals as a weak pound put BPI in a more competitive position.