THE Economic Development Minister has warned that rising British food prices are ‘a cause for concern’ for the Island, after the UK’s inflation rate hit 11.1% last month.
Although Deputy Kirsten Morel said that the Island had been protected from the full extent of inflation in the UK, he warned that the latest published figures – which show a rise in food prices of 16.2% – were likely to have a knock-on effect locally.
‘Of course it is a cause of concern because the majority of our food comes from the UK, so we are likely to import some of that to Jersey,’ he said.
But the minister echoed the message of the Fiscal Policy Panel, a group of independent economists that advises the government, who recently highlighted the recovery of the economy from the pandemic and the prospect of increased tax revenues from profits in the finance sector.
Deputy Morel added that the Island was ‘in a better position than most’ to weather current economic pressures resulting from the situation in Ukraine and the wider geopolitical problems affecting Europe.
‘I think we are in as good a situation as we can be at the moment if you look at the economic pressures around us,’ he said.
And he said he hoped that the Jersey RPI figure would again fall below the UK’s when the December numbers were released, although he acknowledged that trying to make predictions in the present climate was ‘like fortune-telling’.
Harvir Dhillon, an economist at the British Retail Consortium, said: ‘Jersey’s reliance on food imports from the UK means they remain vulnerable to the UK’s high rate of food inflation. As the UK’s inflation continues to rise, it is likely that food prices in Jersey will follow suit in the coming months.
‘However, Jersey’s home-grown fruit and vegetable production may help limit rises for some fresh produce.’
A spokesperson for Waitrose said: ‘No retailer will be immune to inflation, but we’re working with our suppliers to continue offering great value, alongside exceptional quality, industry-leading animal welfare standards, and fair deals for farmers.’
Jersey’s inflation figures are published every three months on the basis of the previous 12-month period, with September’s data showing that the cost of living had risen here by 10.4%, 1.6% above the UK rate. The previous quarter’s figures published for June had shown Jersey’s rate to be 0.3% lower the than UK’s.
However, Deputy Morel said it was important to realise that rising mortgage interest rates played a significant part in the Jersey figure because of the number of Islanders exposed to mortgage repayments, but he pointed to the recent measures taken by the government in its mini-budget, which he said would mitigate the effects of rising costs on those most vulnerable within the Island.
