According to a report issued by the Wealth Division of a well known bank £100 in 1982 had the same purchasing power as £300 does today – such in the loss in value of the pound over a thirty year period.
The report, utilising inflation statistics from the Office for National Statistics (ONS), from which the Government’s questionable Retail Prices Index (RPI) are formulated, compared the increase in prices for a range of basic commodities from 1982 – 2012.
It makes for interesting reading, for instance:-
A pint of draught lager, which cost 73p back in 1982 now costs, on average, £3.18 – that’s a 336% increase.
A standard loaf of bread, which cost 37p in 1982, now costs, on average, £1.24 – a 235% increase.
A litre of diesel, a mere 36p in 1982, is now £1.42 – an increase of 294%
Other basics include:-
Milk 235%
Sausages 177%
Coffee 176%
Eggs 286%
Sugar 123%
Back in 1982 the average price of a three bedroom detached house was £45,211 – compared to £273,700 last year.
What the research shows is that the value of the pound (in terms of its buying power) has decreased by a staggering 67% over the last 30 years.
In fact the figures indicate that the purchasing power of money has declined at an average rate of at least 3.7% a year over the period in question, if the official figures are to be believed.
Should the rate of worth erosion continue then a pint of lager at £10, a packet of cigarettes at £20 and a gallon of diesel at £15 will become realities.
As one economist put it: “Looking to the future, even if inflation is kept firmly under control and rises only in line with the Government’s target, it is likely that the value of money will continue to reduce significantly and decline by more than half its (current) value by 2042.”
To what extent wages will keep pace with an increasingly worthless pound and the adverse effects that will have on society, remain to be seen.
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An interesting documentary and one you will never see on the MSM.
Although it is American in origin it is relevant to us all and explains the difference between money and currency giving details of the rate at which we and much of the rest of the world are printing our currencies into valueless oblivion.
http://www.youtube.com/watch?v=DyV0OfU3-FU&feature=player_embedded#!
As the article so correctly states, inflation has had a devastating effect on real purchasing power. In the early 1960’s about 20% of our money supply was of paper notes and cash. Today, notes and cash are a mere 3% of our money supply. Not much evidence of excessive money printing in those statistics Will? For a better explanation of money and banking visit the British website:- positivemoney.org.uk
This is half the story. What is interesting is when you put it with the rate over time of real household disposable income. See page five of this PDF from the ONS:
https://docs.google.com/viewer?a=v&q=cache:-vNnvGHr7LUJ:www.ons.gov.uk/ons/rel/social-trends-rd/social-trends/social-trends-41/social-trends-41—income-and-wealth.pdf+uk+household+disposable+income+statistics+1980s+to+now&hl=en&gl=uk&pid=bl&srcid=ADGEESgHbOgIfinXpVizmg4g4Uop51QcSBL_ZWwBjNWL-WsYH4l3focXJfhqaP8rOFcOsgV3YiYoFjv5ZLw4OH4WVPxT2wtCZ1IeYuqEwdxAf04TXWLY8QUl_6dWtDb88dxYtZbizcQ6&sig=AHIEtbTlsZncl4789tqKBd8UbC4huhyh5w
In 1982, real HDI is at a value of around 130 per household, in 2009, at around 250. In other words, while prices have in some cases quadrupled, real HDI has risen steadily and moderately to around double. This is concrete evidence that people are getting poorer.
Tell me about it! I earn more now than I have ever done. But it doesn’t go as far as it used to. I get about twice what I earned 20 years ago and then I lived quite comfortably. Now every month is a struggle to make ends meet.
Because we import much more than we export a ‘weak’ pound is NOT in our favour; even what we do export is mainly made out of goods we import.
Therefore we should strive for a stronger pound.
When I first went to (West) Germany in 1961 the pound could buy 11.40 Deutschmarks, when the D mark ceased, because of the change to Euro’s, the pound would only buy around 5 Deutschmarks.