UK inflation fell again in March to a four year low of 1.6%. Jersey numbers are not out till June but were tracking a bit higher with 1.9% RPI reported in December 2013
The ONS released UK CPI numbers this morning.
The Consumer Prices Index (CPI) grew by 1.6% in the year to March 2014, down from 1.7% in February.
The largest contribution to the fall in the rate came from transport, particularly motor fuels, with other smaller downward effects from the clothing and furniture & household goods sectors.
These were partially offset by upward contributions from restaurants & hotels and alcohol & tobacco.
These falls come alongside a spike in house prices with central London property reported to be increasing by around 17%pa.
The disparity between Jersey and the UK in retail prices has been the subject of much conjecture but no real light seems to have been shed as to why Jersey prices are consistently higher than the UK beyond the obvious attribution to increased transport costs.
The December 2013 Jersey inflation rate was 1.9% and in recent years attempts have been made to more closely scrutinise the difference in UK and Jersey inflation rates and for the consumer more pertinently the actual prices of goods.
The table below produced by the States of Jersey statistics department would indicate that Jersey prices are about 9% higher than the South of England. Is this a justifiable gap or would increased competition bring this down bearing in mind the majority of goods are shipped or airfreighted from the UK.
Given prices have a significant influence on inflation and wage settlements this is a key issue for Jersey with the economy relying principally on agriculture, tourism and finance. All three are sensitive to wage costs in terms of competitiveness.
The June RPI Jersey numbers are likely to receive an even greater focus than usual in an election year. Let's hope they mirror the UK downward trend and are also accompanied by growth in the economy and jobs.
Perhaps more focused time and investment from the Channel Islands Competition Regulator would pay dividends with much of its current strategic plan focusing on utility regulation and competition law. An alternative route may be for the fiscal policy panel remit to be expanded into wider fiscal, economic and competition issues.