Figures released on Friday show that the increase behind the current inflation rate of 3.6 per cent has been driven by the cost of food and housing since the last statistics were published three months ago. The increases are likely to impact heavily on working families, which spend a high proportion of their money on mortgages and food.
The annual inflation rate for food reached 3.9 per cent, with price rises recorded for bread, cereals, biscuits and cakes, fish, cheese, milk and dairy products.
Meanwhile, housing prices climbed to 3.2 per cent, with the cost of many mortgages pushed up by the recent increase in the Bank of England’s base rate.
Malcolm Ferey, the chief executive of Citizens Advice Jersey, said that increasing food prices were the most common cause of concern for his clients in terms of making ends meet.
‘If you ask anyone who runs a household budget they will tell you that the biggest increase has been in the cost of food,’ he said. ‘There’s more choice over here than before but the basic costs of life do seem to be continually increasing. Housing has always been fairly expensive in Jersey but we are starting to see increased rents really eating into people’s household budgets.
‘Both of these things are creating strain on purses.’
He added that he was concerned that an increasing number of people seemed to rely on food banks for long-term assistance to make ends meet.
‘Food banks should only really be used for emergencies. When they are being used long-term, it needs to be looked at because something is going wrong,’ he said.
Vini Jones, of the Grace Trust, which runs a food bank in St Helier, said that a lot of working Islanders are resorting to their services.
‘We get people coming down here who are on working 40-hour weeks on zero-hours contracts,’ he said.
‘People often come in to see us when there is something like a doctor’s bill they can’t afford and the extra, let’s say £20, we can save them on food can help get them by.’
States economist Greg Boyd said that the rising inflation rate had also been caused by Brexit, which had caused the cost of imports to increase.
‘A lot of it will still be to do with the de-valuing of sterling after the referendum,’ he said.
‘We are not following a particularly different pattern from the UK. Eurozone inflation is quite a bit lower and it is because of the exchange rate.’
But he added that he thought that the climbing inflation rate would soon level off and pointed out that in recent years it had been unusually low.
‘I think the fall in sterling that we have seen has worked its way through now, that’s the expectation,’ he said.
‘And if you look at the last few years of RPI [retail price index – inflation] it has been very low. We are probably seeing it prop up to more normal levels now.’
