NOT so very long ago it looked as if the battle to control inflation in Jersey was being won hands down. In September 2005 the rate of increase in the all-items Retail Price Index had fallen to two per cent and there were smiles on the faces of Treasury staff and their political bosses.

It is true that, over the course of a number of years, intense efforts have been made to curb inflation, but the latest figures, made public this morning, amount to a stark reminder that adverse economic forces can undermine even our best strategies.

Today’s figures also demonstrate very clearly that both internal and external factors fuel rises in the rate of inflation.

For the latest internal factor we have to look no further than the Goods and Services Tax. Analysis carried out by the States Statistics Unit shows that GST contributed 1.9 per cent to the new all-items RPI figure of 6.4 per cent. The truth is that everyone could see this coming, but seeing the latest rise in black and white nevertheless comes as a shock.

We are assured by Treasury Minister Terry Le Sueur that the initial effect of GST will melt away because of its one-off nature, but in the meantime the burden of the extra three per cent that we must pay in tax is made heavier by the rise in costs driven by that same tax.

In the case of GST, however, we are at least dealing with a measure that is within government’s control and has been designed with the longer term health of the economy in mind. By contrast, we are powerless to influence the commodity price rises which have also contributed to the RPI’s rate of change.

It can, of course, be argued that the recognition that global factors will always tend to thwart our best efforts to keep the lid firmly on inflation simply means that all members of the Island community must work harder to control adverse domestic forces such as excessive wage demands and unwarranted price hikes.

With the Bank of England Monetary Policy Committee weighing up the pros and cons of further interest rate cuts – another matter entirely beyond our influence – the local battle and individuals’ attitudes become more crucial than ever.