Cost of living rose by 3.8% in past year

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THE cost of living rose by 3.8% last year, the largest increase since 2018, latest figures published by Statistics Jersey show.

Economic Development Minister Lyndon Farnham said that, while the increase was expected, the rise in what he described as ‘essential items’ was of particular concern.

Among the highest rises were in heating and lighting costs which rose by 9.5%, while housing costs rose by 3% and household services by 3.9%. The cost of motoring increased by 5.9%. These items showed the largest rises with the total RPI increase.

Food prices increased by 1.9% over the 12 months to December 2021, up 0.5% from the previous quarter, and fares and travel costs rose by 5.9%, the latter nevertheless constituting a fall in the rate of increase from the 9.9% figure calculated in September.

Commenting on the figures, Senator Farnham said: ‘We have seen a concerning increase in the contribution of essential items to the RPI such as fuel and food.’

He added that the inflation strategy group had been reconvened earlier this month to develop a new strategy in the face of rising prices. However, he was circumspect about its potential to arrest significantly the upward trajectory, given the Bank of England’s continuing inflationary forecasts for the UK.

‘We must bear in mind that we can only make a small difference by Island policy because most of the impact is caused by global factors,’ he said, adding that they would follow the recommendations of the Fiscal Policy Panel.

The latest RPI report shows that the figure for the previous 12 months rose to 3.8% from 2.9% in September last year, while the RPI pensioners index and the RPI low income figures – data adjusted in both cases to take account of costs for potentially vulnerable groups – increased by 4% and 3.3% respectively.

However, while the Island’s cost of living increase figure was identical to the UK’s figure in September last year, it rose more gradually in Jersey over the last quarter of 2021. Guernsey meanwhile recorded its highest rise in inflation since 2008 yesterday of 4.4%.

Over the 12 months to December 2021, Jersey’s RPI increase of 3.8% compared with 4.8% in the UK, a differential which Senator Farnham ascribed to differences in the ‘shopping baskets’ of the UK and Jersey, the former influenced to a greater extent by the greater impact made by natural gas costs passed on to the UK consumer.

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