Inflation rate falls to 5% locally
Guernsey’s inflation rate has continued to drop.
Latest figure show it is still running at 5%, but this is a significant drop compared with 8.3% at the same time last year.
Some aspects are still rising, with housing costs – mortgages, rents and bills – going up by more than 10% in the last year, while leisure services, such as entertainment subscriptions, exercises classes and holidays, have gone up by more than 8%.
In the past quarter, 12 of the 14 RPI groups have seen an increase in the last three months, with the biggest increase being 6.4% for tobacco products, after increases in excise duties. Clothing and footwear was the only area that dropped.
‘The prices of many items in this group are volatile, with regular sales and special offers,’ the States said.
The price of food has stabilised.
Richard Hemans, economics lead for the Institute of Directors, said that local inflation was remaining 'stubbornly high', even though it has fallen for the past five quarters.
Inflation in Jersey is currently 7.5% but should be updated later this week. The UK stands at 4.3%.
Mr Hemans said that as the cycle which saw interest rates rise sharply falls out of the inflation calculation, the impact of housing on the headline rate should fall and bring overall inflation down too.
