Jersey Makes Top Priority Of Fighting Inflation

Tax-news.com

07 February 2000

Jersey's Finance and Economics Committee has set as its top priority the reduction of Jersey's rising inflation rate in order the ensure the commercial competitiveness of the Island is not damaged by further rises.

Although Jersey's inflation rate peaked at a respectable 4.4% last year, this represents double the inflation rate of offshore competitor Guernsey, and is also well ahead of UK inflation. The first task of the Committee will be to determine the reason for these discrepancies, particularly the relative stability of the retail price index in neighbouring Guernsey compared with Jersey.

Figures released last week showed a 1% rise in the Jersey RPI last year compared with only a slight rise of 0.2% in Guernsey. Committee president, Senator Frank Walker, has admitted that although he doesn't yet fully understand why Jersey's RPI is twice that of Guernsey, part of the blame can be traced to recent Government policies such as the Regulation of Undertakings and increases on impôts duties. But Senator Walker is also adamant that these are not the sole factors, claiming that the effect of Government measures only accounts for around a quarter of the prices that make up the RPI.

According to Senator Walker last year's poor inflation performance can only be explained by a lack of true competition in Jersey. 'It must also be said that some retailers are clearly try to take maximum advantage of the wealth being generated by our buoyant economy by setting their prices as high as possible.

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