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If only the Bank of England could get interested in beer price suppression
Beer Bubble: How Price of a Pint Has Risen Twenty-Fold
By Dan Hyde
The Telegraph, London
Thursday, March 6, 2014
If the cost of a house seems to have gone through the metaphorical roof over the past 40 years, it is not the only commodity to have been fizzing. The price of beer has risen even more dramatically.
A pint of lager has gone up 20-fold, or by 1,948 per cent, since 1973. The average detached house, by comparison, went from £16,980 to £305,391, a relatively modest 1,699 per cent rise.
Economists warned on Thursday that a growing portion of take-home pay is being devoured by basic spending in shops, pubs, and at the petrol pump and the situation is worsening as a result of slow wage growth in the wake of the financial crisis.
... Dispatch continues below ...
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Ashish Misra of Lloyds Bank Private Banking, which conducted the study, said that in another 40 years, an individual would need L3 million to enjoy the same lifestyle as a millionaire today.
"There is no doubt that the value of money has fallen dramatically since 1973," he said. "It is likely to be reduced significantly further over the next 40 years even if inflation is kept firmly under control."
The research, using data provided by the Office for National Statistics, found that draught lager had risen from 14p a pint in 1973 to L2.87 last year. Petrol prices were 17 times as high, with the price of a litre of diesel growing to around L1.41, from 8p in 1973.
An average detached house now costs 18 times as much as it did in the same year. By comparison, the average weekly wage has risen a a little under fifteen-fold in four decades, from L42 to L620.
On a more positive note, the cost of most foods, including milk, apples, bread, butter, and carrots, has risen more slowly than the average wage.
Even so, the value of the pound has shrunk overall so much that L9.48 in 1973 would have the same spending power as L100 today. In other words, the value of L1 has fallen by 91 percent.
Looking ahead, Lloyds suggested that anyone shopping in 2053 will need to spend L311 to buy goods that would cost L100 today.
It based its estimates on an annual rise of 2.8 percent in the retail prices index. This is consistent with the government's target for inflation.
By decade, retail prices grew most rapidly between 1973 and 1983, at an annual average rate of 13.6 percent. The lowest inflation was between 1993 and 2003, Lloyds said, at 2.6 percent annually. In the decade to 2013, annual inflation averaged 3.3 percent.
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