Cost of living heading for highest in 30 years

Figures for the first quarter of this year were released yesterday, showing a headline inflation figure of 5.6%, rising to 5.9% for RPIX, the figure which excludes mortgage interest payments.

The RPIX is the island’s highest since the financial crash of 2008, and has risen 4.2% year-on-year.

The last time inflation was significantly higher in Guernsey was in 1991, when it was coming down from a 10% high.

The new figure is published when islanders are concerned about forthcoming tax rises from the States pushing their cost of living even higher.

Policy & Resources is in the middle of a tax review looking to raise up to £85m. extra in taxes over the next few years.

But P&R president Peter Ferbrache said the two issues should not be conflated.

‘We are watching what's happening to prices and the cost of living for islanders very carefully,' he said.

‘While we’ve so far been better placed than the UK and many other jurisdictions to withstand the global pressures that are driving prices up, it still has a very real impact for islanders who see and feel it in their household bills.

‘We must also separate out this rise in inflation, which we don’t expect to continue in the long-term, with some of the planning we must do for the provision of essential services in years and decades to come.

‘We’re still set to see the significant changes to the make-up of our population, so that remains a serious challenge we must address.'

Guernsey’s RPIX was considerably lower than the UK, which has hit 9.1%, the highest since 1990. But actions taken by the UK to curb inflation will have an impact on Guernsey.

Deputy Ferbrache said the government could not control all factors affecting prices, but could influence some of them.

‘So we must keep it at the front of our minds in the decisions we make over these coming months.’