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British manufacturers unexpectedly cut their prices in December at the strongest pace since April 2020, which is welcome news for the Bank of England as it considers how much it should raise interest rates to deal with rising inflation, BNR reported.

The producer price index (PPI) at factory output fell 0.8% in December from a 0.1% drop in November, the sharpest decline in producer prices since April 2022. show data of the official British statistics ONS.

Year-over-year producer price growth slowed to 14.7% in December from 16.2% in November, weakening for a fifth consecutive month and marking the weakest increase since March 2022.

Despite the decline, manufacturing inflation remains high both historically and relative to other countries.

British producer prices rose by an average of 2.4% between 1985 and 2020 before Russia's invasion of Ukraine sent gas and food prices soaring.

Britain's PPI fell more slowly than in Germany, where manufacturing inflation halved between August and December 2022.

High price pressures and their impact on spending and activity continue to be expected to push the UK economy into recession this year.

British economic activity fell at its fastest pace in two years in January