SHG Responds to Inflation Increase
27 January 2025
Earlier today the Statistics Office published the Q4 2024 Consumer Price Index (CPI) which shows inflation for the year to Q4 2024 has increased to 8.2% which is driven largely by:
- increases in electricity prices in January and July,
- increases in the price of telephone tariff and mobile data packages in July, and
- increases in the price of bread, local meat, and public transport in December.
This is a significant increase, the highest in 15 years. Ministers are aware of the impact this will continue to have on the community at large and wish to reassure the public that options are being considered to lessen the impact on the most vulnerable such as, raising the minimum wage substantially and looking at raising the personal tax allowance from April 2025. Furthermore, Ministers have stressed to the UK the financial pressures on the island and have requested additional funding as part of the zero based budget submitted during this year’s Financial Aid discussions.
The Minister for Treasury Marks Brooks added:
“We fully recognise the impact inflation is having on all aspects of community life, and in normal situations governments would use monetary policy to influence the rate of inflation. However St Helena is dependent on financial aid from the UK and therefore normal policy tools are limited. In addition to continuing the reduced customs duty on essential food items, subsidising the cost of utilities, public transport service and providing a subsidy to transport freight from Rupert’s into Jamestown, policy options are being considered to increase the minimum wage and to look at increasing the personal tax allowance which will lessen the impact of the higher inflation rate. The success rate of such policy options however, will be heavily dependent on the outcome of our annual budgetary aid from the UKG, which is not likely to be known until late March/early April 2025.”