The latest inflation figures released by the Isle of Man Government show the annual rate of inflation as measured by CPI for the twelve months to December 2021 has increased to be extremely high at 6%.
“The consumer price index has risen by 6% over the last year, and is now at long-term highs. This inflation is putting further squeezes on the cost of living. These higher costs will be putting particular pressure on households living on fixed incomes,” said Michael Josem of the Manx TaxPayers’ Alliance.
“Another way to think of this extraordinarily high level of inflation: Every pound has lost 1% of its value every two months over the last year.”
In recent months, the Government has imposed increased taxes on hospitality businesses, announced increased fuel taxes on construction, manufacturing and other businesses while ruling out any cut on aircraft passenger taxes.
Inflation is likely to increase the pressure on Manx households in coming months as the following come into effect:
- the Government’s gas price rises;
- the Government’s increased taxes on the hospitality industry flow through the economy;
- increased fuel taxes on construction and other industries.
“Fundamentally, inflation is caused by too much money chasing too few goods and services. The antidote to inflation is improving productivity through improving skills, education, training and investment in improved tools, while reducing supply constraints through efficient infrastructure and a low regulatory burden,” said Josem.