UK Preview 2009, which is the latest in PPL's paper and board demand and forecast series, said that prices in the UK would rise in spite of a fall in paper usage both locally and globally.

PPL Research managing director Lawrence Turk explained that although general price inflation looked "sure to fall", the UK paper and board sector was facing "an unusual set of circumstances".

"While consumption is expected to decline with supply levels rising, certain prices are actually forecast to rise. The sole reason is the distortion created by a weak pound within the market-place," he said.

Turk added that current prices for the majority of paper and board grades in the UK were running "significantly below the levels in mainland Europe" and that this would also lead the UK to "buck the market" in 2009.

He said: "Domestic price levels follow those on the near continent, normally in
terms of movement but especially in actual price levels with prices in the two areas normally on a par.

"Currently, UK prices are running at significant levels below those in the rest of Europe and it is this reason why the expectation is that the majority of UK prices will rise through this year."

Turk added that unless there was another shift in currency rates, UK prices will start to move closer to those in the euro-zone during 2009 through price adjustment.

This will be achieved through a higher rate of inflation within the UK, smaller hikes domestically and erosion in mainland Europe.

Static British prices and significant falls on the near continent or lower deflation in the UK versus Europe are also expected to have an impact.

The 100-page report is published on a half-yearly basis and is available from the independent research company for £795.