Live news: UK producer price inflation is falling to its lowest rate in almost a year

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UK producer price inflation slowed to its lowest rate in nearly a year in December, as cost pressures eased.

Producer input prices — the prices businesses pay for materials and other goods — rose at an annual rate of 16.5 percent in December, down from 18.0 percent in the previous month, and well below the peak of 25 percent in June 2022, according to data released by the statistics bureau. national on Wednesday.

Factory gate prices rose at an annual rate of 14.7 percent in December, down from 16.2 percent in the previous month and a recent high of 20 percent in July.

The Office for National Statistics said the decline in equipment and petrol prices was driven.

Despite the decline, producer price inflation remained high by historical standards and compared to other countries. It averaged 2.4 percent between 1985 and 2020, before Russia’s invasion of Ukraine sent gas and food prices soaring.

The producer price index fell less sharply in the UK than in Germany, halving between August and December, according to separate official data.

Higher price pressures and their impact on spending and activity are expected to push the British economy into recession this year.

“A combination of high inflation, lower real income, higher interest rates and fiscal policy tightening are the main factors affecting growth,” said Hywel Paul, UK head of EY in its UK Winter Economic Outlook.

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