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Inflation high, with early relief unlikely

Inflation in the Isle of Man has risen to its highest level for 27 months.

The Economic Affairs Division of the Treasury says it went up to six per cent in January, from 5.5 per cent at the end of 2010.

The last time it was that high was in October 2008, when a figure of 6.2 per cent was recorded.

Treasury Minister Anne Craine says the latest annual inflation rate comes as no surprise, given the increase in the standard rate of VAT to 20 per cent, from the start of this year.

There's further bad news as she adds 'with oil and other commodity prices still rising, there seems little immediate prospect of any significant relief'.

Mrs Craine says government is well aware of rising inflation and it was taken into account in preparing this year's budget.

The budget included a 7.7 per cent increase in the Personal Allowance Credit for what she describes as 'the least well off' in the local community.

Looking ahead, Mrs Craine says in the next few months there is little likelihood of improvement, but longer term the consensus points towards a much better inflation outlook.

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