JERSEY remains ‘vulnerable’ to UK food inflation due to imports – but the Island’s home-grown production of fruit and vegetables has helped mitigate rises on fresh produce – according to the British Retail Consortium.
The trade association also said that food inflation in Jersey will hopefully drop ‘in the coming months’, after the UK rate fell slightly from around 15.7% in March to 15.4% in May, according to BRC figures.
Statistics Jersey’s latest retail price index report showed that the annual rate of food inflation in the Island stood at 15.8% in March, although the next dataset – which could also show a decrease – is not due to be released until 21 July.
Additionally, the headline inflation rate for the UK recently came down from 10.1% to 8.7%, lower than Jersey’s March figure of 12.7%.
Chief economic advisor Tom Holvey said: ‘While not underplaying the impacts of inflation on households, comparisons between headline UK and Jersey inflation rates are not appropriate, or that helpful, due to the different way they are measured. RPIX [RPI excluding mortgage interest payments] on the Island, which is a closer measure to the UK’s CPI, actually fell from 8.6% to 8% in March. Comparing the March figures in both Jersey and the UK would mean that actually Jersey inflation is considerably lower and the Jersey inflation figure will next be updated in July.
‘Food inflation in the UK is a concern due to imports and, while we expect inflation to continue falling this year, we do need to be aware of the risks.’
British Retail Consortium economist Harvir Dhillon said: ‘Jersey’s reliance on food imports from the UK means they remain vulnerable to the UK’s rate of food inflation. As the UK’s food inflation fell slightly in April, it can be hoped that food inflation in Jersey will follow suit in the coming months. Furthermore, Jersey’s homegrown fruit and vegetable production has helped limit rises for some fresh produce.’
Jersey Farmers Union president Peter Le Maistre, who last year highlighted the need for greater food security, agreed that this was the case.
‘It [UK food inflation] adds more weight to the fact that we should be trying to produce as much as we can for our local markets,’ he continued, adding that this was dependent on retailers ‘backing’ local produce.
Economic Development Minister Kirsten Morel agreed that UK food inflation was ‘still a problem’ and that the government would ‘continue to invest’ in the Island’s agricultural industry.
Deputy Morel has previously expressed a desire for Jersey to develop better freight links with Europe, arguing that it would provide protection against supply-chain vulnerabilities.
‘For me, it [UK food inflation] makes the case quite strongly to have that southern supply route and not be solely linked to the UK in terms of foodimports,’ he added.