Inflation just won't go away
THREE years ago, almost to the day, this column in this newspaper bemoaned the prospect of rising inflation – for various reasons – and said that it would be ‘bad news for Guernsey’.
At that point we’d not even speculated the prospect of Liz Truss and Kwasi Kwarteng at Numbers 10 and 11 Downing Street respectively, and the damage that would be done by that mini Budget of September 2022.
Everyone’s calmed a little since that panic, but the release of Q3 inflation stats yesterday showed that the cost of living is still running far too hot for anyone’s liking.
Jersey has dipped from a high of 12.7% inflation in December 2022 to a headline of 5% from June and RPIX, excluding mortgage interest, which is already below ours. Their updated data is out today.
The UK hit a high of 8.5% but, with more levers to pull, has already been able to knock down inflation to below the Bank of England’s 2% target.
Guernsey did not see quite those highs, but has few, if any, such levers, and frankly it feels like anything that the government might do fiscally would just hike the cost-of-living further.
The past decade has almost made us forget what it’s like to struggle with inflation.
And with States pay talks now under way, it’s going to be a difficult journey for Guernsey for a while yet.