Date: Saturday 02 Jun 2012
In the absence of much market action due to a certain royal related celebration, the Sharecast team have been looking at the changes in the UK economy since Elizabeth II ascended to the throne in 1952. One piece of data that serves as a very good “cross section” of our lives over that time is the retail prices index.
This index is designed to track the change in prices of a basket of commonly bought items so we can establish that elusive notion: “the cost of living”.
The basket of goods in 1952 was broadly based on the one established just after the war in 1947. Unsurprisingly, there are some items that have dropped out of the basket since then, not least wild rabbits, mangles (for drying laundry after washing), corsets, candles and wireless licences (replaced by TV licences).
Perhaps more telling though are the relative percentages, or weightings, attached to different types of items because this tells us how we have become richer and changed our habits on the way.
When the Queen ascended to the throne, we were spending between 35% and 40% of our income on food. That figure is now 11.4%. Spending on tobacco has reduced from a cough inducing 12% to 2.9%.
One figure that may surprise those who worry about fuel bills is that the total spent on fuel and light has dropped from 6.5% to 4.6%; while alcohol is down from 10% to 5.6%.
The point to remember isn’t that the cost of these goods is going down (far from it) but rather that, as our incomes have grown, we can afford to spend more on other things, so the percentage we spend on the bare essentials has decreased. One big change has been the “meals out” classification introduced in 1968, as swinging Britain began to see restaurants as something more than a once a year treat.
Consumerism has been the great, silent meme of British life in the age of Elizabeth Regina. It’s not talked about often because “going shopping” appears too mundane to be worth the bother. But the RPI tells its own story of the last 60 years. Soft continental cheeses are now part of the RPI basket, as are tablet computers.
The technological changes, in particular, tell the story of life since World War II. In 1947, the original RPI basket contained just 4 electrical items: a vacuum cleaner, iron, radio set and gramophone; now there are whole sections of the index related to audio-visual equipment and telephone charges. CD’s and cassettes are now excluded; having been thrown into the dustbin marked old hat.
So what, over all that time has increased the most? It’s perhaps not a cost our monarch worries about overly but the biggest rise in RPI weighting in recent times has been housing: in 1987 it represented 15.7% of the basket, in 2012 it has risen to a whopping 23.7%.
We may be getting richer, but putting a roof over our heads still ain’t cheap.
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