Fall in motoring costs drive reduction in rate of inflation

In the 12 months to December inflation rose by 2.1 per cent. That compares with 3.1 in the UK and 3.2 in Guernsey, and is lower than economists had forecast.

The comparatively low figure, which was driven by a fall in inflation in the last quarter of the year, is largely being put down to the motoring industry, which has seen the cost of new cars, petrol and insurance all drop.

Treasury Minister Philip Ozouf said the figures, which were released by the States Statistics Unit as part of their Jersey Retail Prices Index for December 2012, showed that the economy was struggling but was good news for Islanders currently on pay freezes or low annual increases.