Inflation in Guernsey hits 30-year high

Guernsey has seen the highest rise in the cost of living in more than 30 years, with further increases expected later in the year.

The Bailiwick saw a 6.8% rise in the Retail Price Index (RPI), which is a measure of the increase in price of goods that the average person is expected to buy.

Like Jersey, Guernsey has recorded its the highest figure recorded since 1991.

The States says pressure from high demand in the island's housing market has been a key factor driving the increase.

However, the States also warns that some price increases, such as electricity bills, will not have been reflected in the latest figures which only cover the second quarter the year - though it is forecast that inflation will come down in 2023.

"These levels of inflation are significantly higher than that which we’ve experienced in recent years. They reflect the major international events still happening around us, but they have a very real impact on many people’s finances. But to see it remain lower than the levels the UK is seeing, now in double figures, is at least a bit of good news.

"Policy & Resources will continue to monitor the impacts of the cost of living, and we’re pushing on with the priorities in the GWP which will help in some areas such as housing."The States says levels of inflation remain lower than the UK in part because the island is isolated from some energy cost increases, due to the power cable link it shares with France.

Guernsey's Institute of Directors says more islanders will be feeling the pinch with more pressure being placed on public finances as they feel more pressure to provide more support.

Richard Hemans, who leads on economics for Guernsey's IoD, said: "The biggest impacts are inevitably being felt in food, energy and housing, all essential categories that are leaving consumers worse off financially and with less spend available for discretionary items.

"Businesses are therefore facing a profit squeeze, not only from lower demand but from higher input costs, particularly as employees seek higher wage increases in an already white-hot labour market."