Inflation up by 0.1% on year
GUERNSEY’S annual inflation, as measured by the changes in the RPIX, increased to 2.4% in December from 2.3% the previous year.
The latest Guernsey Quarterly Inflation Bulletin shows the annual inflation rate to be 0.4% higher than in the previous quarter and 0.1% higher than in December 2018.
The RPIX, which excludes the mortgage interest payments, is the States’ preferred measure of inflation.
There are 14 RPI and RPIX groups – food, catering, alcoholic drink, tobacco, housing, fuel and light, household goods, household services, clothing and footwear, personal goods and services, motoring expenditure, fares and other travel costs, leisure goods, and leisure services.
In the year ending December 2019, 11 of the groups saw an increase and three saw a decrease.
Leisure services saw the largest annual increase at 9.4%, contributing 1.1% and 1.0% to the overall RPIX and RPI changes.
The main contributors to the 9.4% annual increase in leisure services were increased package holiday and holiday accommodation costs.
Fares and other travel costs showed the largest decrease at minus 9.3%, contributing minus 0.4 percentage points to the overall RPIX and RPI changes.
The quarterly change in the RPIX, which is subject to seasonal variations in price levels, was 0.1% during the three-month period ending December 2019, 0.2 percentage points higher than the previous quarter and 0.4% higher than December 2018.
In the UK the equivalent RPIX figure for December 2019 was 2.2%.
The annual RPI change in December 2019 was 2.3%, 0.3% higher than the previous quarter and 0.1% lower than in December 2018.
For the quarter ending in December 2019, the quarterly change in the RPI, which can be dominated by trends in mortgage interest payments, was 0%, which is the same as the previous quarter and 0.3 percentage points higher than the quarter ending December 2018.
In the UK the equivalent RPI figure for December 2019 was 2.2%.
The inflation rates are based on the price changes of a ‘shopping basket’ of items. This and their weightings are adjusted periodically based on the results of household expenditure surveys.
More than 1,000 households took part in the survey which from May 2018 to the end of April last year.
The results were used to update RPI basket, to ensure it remains accurate and representative of what people in Guernsey spend their money on.
Changes in the RPI are used to inform tax allowances, social security benefit rates, pension payments, maintenance payments, wage negotiations and rental price reviews.
The next update of the inflation figures is due on Friday 24 April.