Jersey faces biggest rise in costs in four decades

Housing costs - including parish rates, rents and mortgage interest payments - surged by 24.4% in 2022

New figures have revealed the cost of living in Jersey rose by 12.7% in 2022, the fastest rate rise in four decades.

The Retail Prices Index (RPI) for December 2022 said the increase was mainly driven by housing costs, which surged by 24.4%.

In December 2021, the Bank of England raised UK interest rates to 3.5%, their highest level for 14 years, in an attempt to stem rising prices.

Hikes in the cost of food and fuel also contributed to Jersey's inflation rate.

Indisputable evidence

You would struggle to find anybody in Jersey who had not noticed costs heading upwards in recent months.

But these figures provide indisputable evidence to back up the anecdotes.

At the same time as increases in housing costs, islanders were also faced with a 14.2% rise in food prices, and an average rise of 12.3% in petrol, diesel and other motoring costs.

In fact, costs in all but two groups jumped by 5% or more over the year, resulting in an overall inflation rate which is 3.5% higher than the comparable figure for the UK.

For many islanders, wages have simply not kept up; those who have been offered more money, such as civil servants, have accepted below inflation pay rises.

Meanwhile, other islanders have not seen their wages increase at all.

Glimmers of hope

So, what is Jersey's government doing to make things easier?

To ease the rising costs, the government increased tax thresholds by 12% from 1 January 2023 so islanders could earn more before paying tax.

Under ministers' mini-budget, which was approved in September 2022, financial help for people on income support, and for those who do not quite qualify for it, was also increased.

And, amongst other measures, the state pension rate was raised by 7.7%.

Meanwhile, there are perhaps small glimmers of hope.

The increase in the cost of energy was greater in the 12 months to September 2022, at 25.1%, than it was in the year to December 2022, at 22.7%, suggesting a corner had been turned.

The same goes for fares and other travel, which increased by 8.8% between September 2021 and September 2022, but a smaller 4.2% between December 2021 and December 2022.

However, the overall picture is one of rising costs.

The government did not rule out offering more support if the economic situation worsened, but ministers have never made it clear what, exactly, would have to happen for them to take further action.

Looking at the latest figures, many islanders will be wondering whether the government's undisclosed line has now been crossed.

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