WE are over the worst of it, Jersey’s chief economist has said following the release of the latest inflation figures – despite the Island’s rate remaining significantly higher than in the UK and other Crown Dependencies.
High housing costs continue to drive inflation and the cost of living in the Island remains stubbornly high, according to the latest figures published by Statistics Jersey, which show that during the 12 months to September, the Retail Prices Index increased by 10.1% – a 0.8% drop from June’s rate of 10.9%. But experts the Fiscal Policy Panel, an independent group of economists who advise the government, have predicted that the rate will continue to fall to an average of 5.4% next year.
And the Island’s chief economic adviser, Tom Holvey, said that the drop meant “the worst of the inflationary pressures are behind us”.
Housing costs – including mortgage repayments, rents and rates – again made up the largest contribution to the 10.1% rate, with a 26.2% increase. However, the overall change was slightly lower over the 12 months to September, compared with the previous 12-month period.
Figures released last month showed that the average cost of a Jersey home during the spring was an eye-watering £666,000 – although this was down by £20,000 against the same period in 2022 in a sign that Jersey’s market could be cooling.
The Island’s overall inflation rate is higher than the UK’s (6.3%), and higher than other Crown Dependencies. Guernsey’s latest published RPI figure, for the 12-month period ending in June, was 7.3%, while the Isle of Man’s Consumer Price Index showed a 5.7% rise in September.
In Jersey, lower rates of increase for food (see story at the top of this page) – which rose by 10%, down 5% – as well as household goods and travel were cited in the Statistics Jersey report as key factors in the slight easing of inflation.
Fares and other travel were the most marked downward change – with an increase of 1.2% compared with 12.1% in the June calculations. Meanwhile, the price of household goods increased by 6% compared with 9.9% previously.
Mr Holvey explained that the rate’s fall to 10.1% was “in line with the Fiscal Policy Panel’s forecast”.
He added: “Whilst headline inflation in Jersey remains above that in the UK (RPI 10.1% compared with UK CPIH [the Consumer Prices Index including owner occupiers’ housing costs] of 6.3%), much of this difference is due to methodologies, including the treatment of mortgage interest payments. A more like-for-like comparison is between Jersey’s RPI(X) [RPI excluding the cost of mortgage interest payments] and UK CPI. On these measures, inflation in Jersey was 5.4% compared to 6.7% in the UK.”
Mr Holvey added that the FPP predicted a further fall in the rate of inflation to 8.4% in the 12 months to December, and to 5.3% across 2024.
Economic Development Minister Kirsten Morel also responded positively to the week’s figures, describing them as “welcome news for us all”, and drawing attention to the FPP’s forecasts.
He said the government continued to support Islanders with the cost of living.
