Guernsey’s latest retail price inflation measures show an increase in the annual change in RPIX to 5.9%.
While this is the highest annual RPIX percentage change since 2008, this remains substantially lower than the UK, where the equivalent measure has reached 9.1%.
Price inflation in Guernsey has been driven upwards primarily by costs of housing, domestic heating fuels, holidays outside the Channel Islands and motoring increasing significantly over the past year. There have been increases across all of the groups used in the inflation calculations, creating general upward pressure.
In particular, prices are being driven up by problems with global supply chains and disruption to energy markets as a result of the war in Ukraine. However, the impact is less here compared to the UK because of Guernsey’s connection to the French electricity grid which has a high proportion of nuclear power, and our warmer climate and smaller geographic size.
The steps taken by the Bank of England to curb UK inflation over the coming months should also have an impact in the Bailiwick. UK inflation is expected to start falling later in the year, but it may take some time to bring figures back down to their target levels, and Guernsey also can expect to see above average inflation for some time.
Deputy Peter Ferbrache, President of the Policy & Resources Committee said: “We are watching what’s happening to prices and the cost of living for Islanders very carefully. While we’ve so far been better placed than the UK and many other jurisdictions to withstand the global pressures that are driving prices up, it still has a very real impact for Islanders who see and feel it in their household bills.
“We in government cannot control all the factors affecting prices but we can influence some of them, and so we must keep it at the front of our minds in the decisions we make over these coming months. We must also separate out this rise in inflation, which we don’t expect to continue in the long-term, with some of the planning we must do for the provision of essential services in years and decades to come. We’re still set to see the significant changes to the make-up of our population, so that remains a serious challenge we must address.”
Deputy Peter Roffey, President of the Committee for Employment & Social Security said: “We understand that sharp increases in the cost of living put real strain on the budgets of those on lower incomes. The Committee for Employment & Social Security will be monitoring the situation as these higher than normal inflation levels are expected to continue for some months.”