GUERNSEY’S rate of inflation remains negative – but is predicted to rise above zero over the next quarter.

At the end of last month, Guernsey RPI was at -1.2%, compared with -1.3% at the end of June.

Island pay negotiations are frequently based on the September RPI figure.

States economist Andy Sloan said the figures were what they had been expecting.

‘We expect to see it go back to positive next quarter,’ he said, adding that decreasing mortgage interest rates had caused the volatile RPI figures over the past 12 months.

This time last year, it stood at 5.9%.

Housing contributed the largest decrease of -2.5% in the last quarter, -10.8% over the year.

Clothing, fares and other travel and leisure goods also contributed to a negative RPI – which has been consistent throughout 2009. Household services and alcohol groups contributed the largest increases.

Guernsey’s RPIX, the island’s core inflation rate excluding mortgage interest payments, was up by 0.3% on last quarter, at 2.4%. That compares with 1.1% in the UK.