Inflation in Jersey hits double digits for the first time in three decades

Friday 21 October 2022

The cost of living in Jersey has reached double-digits for the first time in 32 years.

The rate of inflation is now 10.4% - a 2.5% increase over last previous quarter. The latest figure, which is based on how much a typical basket of goods has gone up by in the 12 months to the end of September, is the largest quarterly increase since September 1990.

The increase in the annual rate of inflation was mainly driven by Housing, particularly the rising costs of mortgage interest payments following increases in the Bank of England Bank Rate over the last three months.

Excluding mortgage payments, the rate of inflation was 8%.

Breaking down inflation by what people spend their money on, the cost of fuel and light increased by 25.1% over the 12 months to September.

Housing costs increased by 15.9% but had a bigger impact than any other group because most islander spend more on their mortgage than they do on anything else.

It therefore had the biggest contribution by far in driving up inflation.

The cost of motoring, which includes petrol and diesel, rose by 12.9% over the 12-month period while household goods went up by 12.4%. 

This was the second biggest contributor to the annual change in the retail price index, which is the official term for Jersey’s inflation rate.

However, prices in the Motoring group increased by less over the twelve months to September 2022, than over the twelve months to June 2022, giving a slight downward contribution to the change in the annual rate of increase.

Food rose by 10.7%, catering went up by 10% and travel costs increased by 8.8%.  

Underlying inflation, which excludes mortgages and indirect taxes, increased by 8.2% over the twelve months to September 20221, the largest rate since this index, known as RPI(Y) was first produced.

Assistant Treasury Minister Richard Vibert, who is deputising for Treasury Minister Ian Gorst while he is away, said: “The high inflation figure announced this morning will clearly be worrying for islanders and we shouldn’t underplay that. 

“However, the high figure wasn’t wholly unexpected, and we took the possibility of such a rise into account in designing the scale of measures within the recent mini-budget. 

“It is also important to recognise the inflationary pressures in the headline rate includes mortgage interest rates that have risen recently. Thankfully, these rises won’t actually be felt by many Islanders at the moment who either rent their home or are still locked in to fixed-term deals.

“The Government will continue to monitor the situation closely and is actively considering further help where necessary so we can offer support in a targeted and timely manner. 

“However, we should also be aware of the damage that can be done by the wrong interventions at the wrong time and ensure our actions are affordable and promote stability.”