Inflation keeps dropping but kept high by energy, housing and food costs
Inflation has continued to drop in the last quarter, but rising energy prices, housing costs and food prices is keeping it high.
RPI inflation on all items dropped to 5.3% – compared with 7.3% in June 2023 and 5.8% in March 2024.
RPIX, ‘core’ inflation which excludes mortgage interest payments and is used for public sector pay negotiations, is now at 4.5%, down from 6.8% year-on-year and 0.5% down on the previous quarter.
Twelve of the 14 RPI groups saw a price increase in the three months ending in June 2024. Fuel and light – which covers electricity, oil, coal and gas – rose by 12% over the year, while the cost of housing increased by 10.5%. The gas unit price rose by 8% in January, while the standing charge increased by 10% in May.
Home heating oil prices vary from about 80p to 85p a litre currently, compared with about 80p a litre in June last year.
These inflation figures pre-date Guernsey Electricity’s price increase on 1 July, when standing charges increased by 35% and usage charges rose by 5.5%.
Housing, which covers mortgages, rents and charges, contributed 1.8 percentage points to the annual increase.
‘The mortgage interest payment item increased in price this quarter,’ the report stated.
‘There were also increases in some rents, parish charges and refuse collection and disposal charges.’
Food prices increased by 2.3% in the last year, and 0.6% in the last quarter.
‘Various food items saw price changes during the quarter, with spreadable butter, bananas and lettuce being examples of items where there were price reductions, and meat, olive oil and cereals among those with higher prices.’
The cost of new clothing and footwear fell by 2.1% in the last year, and by 2% in the last quarter.
‘The prices of many items in this group are volatile, with regular sales and special offers,’ the States said. It noted bargains in women’s jumpers and jeans, and men’s shorts and shirts.
While Guernsey’s RPI is dropping, it is much higher than the UK, which has seen a sharp decrease in RPI. UK inflation has fallen from a peak of 14% at the end of 2022 down to 2.9% in June.
