Britain's producer price index (PPI), which measures inflation of goods bought and sold by manufacturers, fell 0.1 percent in December last year compared with a fall of 0.3 percent in the previous month, the Office for National Statistics (ONS) said on Tuesday.

The statistics agency blamed the monthly fall to petroleum products with price falling 1.5 percent in December compared with November and declining 0.4 percent in the year to December.

However, "this fall was partially offset by a rise in food products," said the ONS.

According to the ONS, food prices hiked 0.2 percent in December compared with the previous month, and up 2.9 percent year on year in 2012. Prices of clothing, textile and leather products fell 0.3 percent between November and December and rose 1.6 percent in the whole year.

The total input price index, which indicates the movements of prices of materials and fuels bought by manufacturing industry, rose 0.3 percent year on year in 2012, of which the index fell 0.2 percent in December, down from a rise of 0.1 percent in November.

Meanwhile, the ONS said Britain's consumer price index (CPI), a key gauge of inflation, remained unchanged for the third month in a row to stand at 2.7 percent in December.

PPI is a key measure of inflation in Britain together with other indicators such as the Retail Prices Index (RPI), Consumer Prices Index (CPI) and Services Producer Prices Index (SPPI). Endi

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