After inflation hit 9% this week, the chair of the poverty committee said the government needs to help people ‘weather the storm’.

It was a rise from 6.7% in March – it’s currently 9.1% in the UK.

Speaker of the House of Keys Juan Watterson said: ‘With inflation hitting its highest level this century, its effects are going to be felt all over the island but it will be those earning the least that will feel it the hardest.’

This increase for the island, as measured by the consumer price index, is in large part due to high air fares coinciding with the first TT to be held since 2019, according to the government.

The category of ‘transport’ remains the largest contributor to the rate of inflation, providing a 3.9% increase in the overall 12-month rate.

Five items within this category show significant increases. ‘Other travel costs’ experienced the biggest rise in prices (68%), followed by ‘petrol and oil’ (30.8%) and ‘air travel’ (30.2%).

This is followed by ‘Housing, water, electricity, gas and other fuels’ with a 2.3% increase.

Within ‘Housing, water, electricity, gas and other fuels’, ‘oils and other fuels’ experienced the largest rise in prices with 82.7% compared to the same month last year.

Mr Watterson said: ‘The jury is still out as to how long the current spike will last, and there are mixed economic signals.

‘The drivers of inflation have been gas (up 78% over 12 months) and oil and petrol (up 83%), both of which are outside of the influence of the Manx Government. ‘Gas prices have been volatile as countries adjust to the move away from Russian gas, and a drive to domestic energy security.

‘Petrol prices are stubbornly high, and show no signs of coming down in the next 12 months.

‘A rise in energy costs will be felt in other sectors over time. Many local businesses are still weening themselves off Covid support, enjoying the uptick in business confidence that will take a hit.’

He explained that those who can afford to support local business should be encouraged to do so.

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‘Not via the expensive and ill-conceived LoveIOM card, but based on good entertainment, food and drink offerings that show the island at its best,’ the Speaker said. ‘What should the government do to help during these difficult times?

‘Sensibly, it’s keeping the price of bus travel down, making it cheaper to use public transport, saving workers money as well as bolstering government revenues.

‘Government will need to think hard about the services it provides and how it provides them, and we can all play a part in identifying and cutting waste and cost in government.’

The Speaker has been in his role as chair of the poverty select committee for four years and said the time has taught him that many people are ‘living payday to payday’ and high inflation will be felt ‘quickly and dramatically’.

He added: ‘At the moment though, food inflation is around 5.4% – high, but not crisis levels.

‘I believe the Treasury Minister should return with an interim inflation increase to the social security budget in October, increasing pensions and benefit rates in order to help people stay on top of bills.

‘Benefits go up by inflation every April, but this would be a welcome help to thousands of struggling Manx households instead of waiting a year whilst the value of their fixed income quickly erodes.

‘We must also hope for pragmatism on both sides of public sector pay negotiations which has trailed behind even the modest inflation in recent years, but will not be easy for government to fund.’

Mr Watterson said that ultimately the public would appreciate a ‘global facing, diverse economic base with low unemployment’ which would provide a ‘solid foundation of wages and growth to mitigate the massive swings that small economies can otherwise be susceptible to’.

‘It will take time for those higher income tax receipts to feed into Treasury, for global prices to stabilise, but government can cope with this in the short term whilst the difficult decisions of service prioritisation are decided,’ he said.

‘This cannot last forever, but we will need to help people weather the storm.’