Accommodation costs biggest contributor to inflation drop

Annual inflation, excluding mortgage interest payments, was 2% in September 2020.

This is 0.4% lower than in the previous quarter, but the same as in September 2019.

Comparatively, the UK's RPIX figure for September 2020 was 1.4%.

Quarterly changes in the RPIX are subject to seasonal variations in price levels, with quarter one changes usually the highest.

According to the Guernsey Quarterly Inflation Bulletin, the biggest contributor to this quarter's decrease was accommodation costs in the Channel Islands and the UK.

These price changes had been imputed in the same way as travel had in the first two quarters of the year, but now many are available and prices have been collected for this quarter.

Fares and other travel remain severely restricted, so to keep the inflation rates in line with what would be expected at this time of year, and in order to prevent major discrepancies later in the year, prices for the first two quarters of the year were imputed using historic average price changes in this group over the same periods for the previous five years.

The inflation rate of food dropped slightly, by 0.4%, and the bulletin said the majority of items in this group were collected as normal, so the impact of Covid-19 was minimal.

However, this quarter saw a 0.8% increase in the prices of bottled cider and some wines.

The price of electricity went up this year and the price of keresone reduced slightly, meaning the overall fuel and light inflation was 1.5%.