A DROP in Jersey’s inflation rate provides a ‘glimmer of hope’, the chair of Jersey’s Consumer Council has said – but Islanders will not see price decreases, as rises remain ‘astronomical’.
Carl Walker added that due to a seasonal drop in fuel prices, and continued increases in supermarket prices, a litre of petrol is now cheaper than a litre of milk.
After housing, food and household goods were two of the largest contributors to the inflation rate over the last 12 months, with prices rising by 15% and 9.9%.
While overall inflation has slowed to 10.9% from 12.7% in the 12 months to March 2023, Mr Walker said: ‘It’s important to remember that a drop in the RPI doesn’t mean that prices are going down. It just means that they’re not going up quite as fast.
‘However, 10.9% is still astronomical by anyone’s standards and unsustainable in the long term, because wages aren’t going up at the same rate.’
At the end of June, a report revealed that the average household income had decreased by 4% since 2019/2020 after adjusting for inflation.
He added: ‘However, that said, there is a glimmer of hope. We have been told to predict a slowdown in the economy in the autumn, and this seems to have come a little bit earlier in the summer, so that should give us some hope that we are on the right path.
‘But we have just seen in the news this week a promise from Putin to restrict the export of grain from Ukraine and that is inevitably going to impact food prices again when the supply runs out.’
Wheat prices on the European stock exchange soared by 8.2% on Wednesday from the previous day, with corn prices up 5.4%.
‘Islanders can expect to see bread and pasta and other staples climb back up again. It will be different this time, because any big increases are limited to certain products. There are events going on in the world that might not initially seem like they’re going to impact the cost on Jersey shelves, but they will filter through.
‘At least these figures allow us to ask the question: are we over the worst?
‘Inflation can’t jump from 12% to zero overnight. It will be a slow burn to bring it back down again, because contributing factors like the war in Ukraine, Brexit, the knock-on effect from Covid, are still ongoing.’
Mr Walker further said that ‘there’s every chance we’ll see a further reduction before Christmas, but we need to wait and see what happens as we head into winter and the price of oil responds to demand’.
