Loosening inflationary pressures have helped UK producers record a decline in pricing through December, leading to forecasts of easing pricing pressures on consumers and businesses through the end of 2012.

The price of UK produced goods has fallen by 0.2% in December, surprising analysts to reflect easing inflationary pressures that could filter through to consumer and business pricing through the second half of the year.

According to figures released by the Office for National Statistics, the drop was the first in UK producer pricing since June 2010, with a year-on-year rise of just 4.8% the lowest for some twelve months.

Analysts have suggested that the fall in pricing serves as an indicator that inflation will come down over 2012, which could fuel consumer demand and ease the burden on businesses looking to grow and invest.

While the UK rate of inflation stands at 4.8% in November, the Bank of England has advised that it anticipates inflation to fall to within the parameters of the UK’s target 2% inflation rate over the end of 2012 and into 2013.

Meanwhile, consumer and business demand remains weak as the UK economy continues to suffer from the overbearing impact of the Eurozone crisis, while public sector cuts suppress short-term domestic growth.

With the regional outlook more than uncertain, the UK economy is expected to feel a continued dampening effect through 2012 as a result of a combination of domestic austerity and wider macroeconomic fears across Europe.

The British Chambers of Commerce’s chief economist David Kern said that the figures were “moving in the right direction”, spelling lower consumer inflation through the coming twelve months.

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