Jersey's rate of inflation 'falling faster than expected'

Image caption, Figures showed food prices fell slightly but the cost of motoring rose at double the rate of inflation

The rate of inflation in Jersey has fallen faster than expected, according to a government economist.

Figures from the States showed the retail prices index rose by 3% in the year to June, down from 4.7% in March.

Doug Peedle, the States of Jersey economic adviser, said because the effect of Jersey's goods and services tax had fallen out of the index, the rate of inflation had slowed.

But he said it was a mixed picture for the island's economy.

"Prices are still rising in general across the economy but there are one or two chinks of light there," Mr Peedle said.

'Weak global economy'

"We are seeing food prices falling quarter on quarter, albeit slightly, and fuel and light prices are coming down slightly as well.

"That is reflecting the global trends where commodity prices have started to fall but again that is reflecting a very weak global economy as well."

The figures also showed the cost of motoring rose at double the rate of inflation.

Advocate Rose Colley, from the Jersey Consumer Council, said it was an area that needed investigating.

"I think for those that use their car a lot then clearly that is of some concern," she said.

"What I couldn't see is why the cost of insurance has gone up in the island so much because the cost of motoring overall has gone up by 6% on average which is a big increase."

Jersey's treasury minister Senator Philip Ozouf is due to release his Medium Term Financial Plan for the island on Monday.