GUERNSEY has officially entered deflation for the first time since records began in 1965.

The retail price index stood at minus 1.2% at the end of March, although the RPIX figure, which excludes mortgages, stood at 3.3%, down on December’s 4.6%.

Chief Minister Lyndon Trott (pictured) said he wanted people to concentrate on the new RPIX figure.

‘The first thing to remember is that we are not in a deflationary environment,’ he said. ‘The RPI rate is due to exceptional movements in the interest rate last year. Basically, the drop into negative territory of RPI is down to extreme movements of the Bank of England base rate from 5.25% to 0.5% from the first quarter of 2008 to the first quarter of 2009.’

RPI dropped from 1.2% in December and from 4.8% in March last year.

Jersey was still experiencing inflation at the end of March with an RPI of 2.1% and the equivalent figure in the UK was minus 0.4%

Deputy Trott said Guernsey’s key figure was the core inflation rate at 3.3%. That showed inflationary pressures still remained in the economy.