Guernsey inflation highest since 2008

Guernsey is experiencing the highest rise in inflation since 2008.

The Retail Price Index (RPI) which reflects the cost of living increased by 4.4%, during the year to December 2021.

The figure excluding mortgage interest rates for the bailiwick (RPIX) stood at 4.6%.

RPI, the main measure of inflation in the island, measures the average change in prices of goods and services purchased by households.

Liz Laine, senior economic and policy analyst for the Government of Guernsey, said while they have risen, the figures were not as high as the levels seen in the 70s, 80s or early 90s.

She added: "This increase is driven by the extraordinary events of the past couple of years and is being felt in most countries.

"The pandemic has had a huge impact on global supply chains which means that shipping costs have increased.

"The effects of Brexit on the movement of goods will be felt here too."

Sue Devine, manager of the Mill Street Community Cafe, said: "It [inflation] makes a huge difference to us. The price of milk goes up quite regularly.

"All of the basic ingredients are getting more and more expensive."

By comparison, Jersey saw a 3.8% rise in its RPI data - its highest rate for three years.

Bubbling under the surface and hardly unbeknownst to politicians is a cost of living crisis in the Bailiwick of Guernsey.

In recent months the price of milk has gone up, gas bills have increased and even the cost of your local paper has risen by 5p.

None of this is specific to Guernsey - but on an island where healthcare costs and the cost of housing is prohibitive to say the least, there's no doubt Guernsey people are feeling the pinch.

It presents a pretty unique problem for this States. This year Policy and Resources will be trying to sell the concept of a Goods and Services Tax (GST) to its people - with the threat that the island's ageing demographics will be putting pressure on current services.

If it's going to meet anything except a blunderbuss of a backlash, the progressive measures which are proposed alongside any new taxes will need to be communicated effectively, with many islanders already struggling with these inflationary pressures.

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