The art installation by Arabella Dorman has seen the dingy hung from the ceiling.
It's been put up to encourage visitors to remember all those who are fleeing violence.
While breaking away from the traditional Christmas display, the church says it does portray the story of Mary, Joseph and Jesus fleeing Bethlehem and becoming refugees.
The display was unveiled on Sunday and will hang above the congregation throughout the Christmas period.
Speaking to Premier, Revd Lucy Winkett, rector at St James, said: "We won't be able to escape the fact that the Christmas story is played out in front of us as family after family get into dinghies and keep trying to escape from war zones.
"But we will still want to celebrate the joy and wonder of Christmas and the resilience of the human spirit."
Listen to Premier's Marcus Jones speaking to Revd Lucy Winkett here: