And prices are now rising more slowly in Guernsey than in the UK.
Annual inflation was 3.3% at the end of September 2025, down from 3.9% at the end of June and 5.1% at the end of September last year.
The equivalent annual rate in the UK is currently 3.8%.
Guernsey's RPIX figure, which excludes mortgage interest, is unusually at the same 3.3% figure.
The latest local figures, released by the States yesterday, showed that the greatest upward pressure on local prices over the past year came from tobacco, catering and housing costs, especially rents and mortgage payments.
That came as no surprise to Pierre Blampied, managing director of mortgage broker SPF.
‘It’s good that our figure is less than the UK,’ he said.
‘In terms of the housing market, Guernsey’s big problem is the rental sector. It’s a massive problem. Rental costs are often ludicrous.
‘There is so little rental stock being chased by growing demand and so prices are going up – it’s simply supply and demand – and there is no cooling of that trend.’
Mr Blampied said that pressure on the rental market was also increasing because of the number of property owners choosing to leave the buy-to-let sector.
However, he said that house prices had stabilised somewhat, and it had proved a busy year for mortgage deals, especially at the first-time buyer end of the market.
Inflation locally and nationally is expected to decrease further next year, with mortgage costs making a contribution.
‘I still think we are in an environment where mortgage rates will continue to fall, but the UK’s persistent inflation problem has slowed the downward trend,’ said Mr Blampied.
The figures released yesterday revealed that tobacco prices went up 11% over the 12 months to September 2025, catering prices increased by 6% and housing prices rose by 5%.
In contrast, the price of both household goods and clothing and footwear fell by 1%, and the price of leisure goods declined nearly as much.
There was an increase of 2.5% in motoring prices, which will be the focus of a States debate next week when deputies decide whether to back Policy & Resources’ Budget proposal for an above-inflation increase in fuel duty or a counter-proposal from Deputy Jayne Ozanne for a real-terms cut.
P&R president Lindsay de Sausmarez and treasury lead Gavin St Pier were unavailable to comment on the latest inflation bulletin.
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