Thursday, 7 May 2015

Economic numbers at the start of the new government

Just for the record let us look at some economic numbers, and compare with the same numbers in May 2010 just as the Tory-led coalition was taking power.

                              May 2010   May 2015

National debt:                £915bn     £1,560bn
Budget deficit:               £168bn     £76bn
Base rate:                    0.5%       0.5%
FTSE 100:                     5350       6885
Quantitative easing:          £200bn     £375bn
VAT:                          17.5%      20%
CPI inflation:                3.4%       0.0%
Consumer price index:         114.6      127.6
One pound is worth:           €1.1683    €1.3486
                              $1.4496    $1.5214
                              CHF 1.64   CHF 1.40
                              NOK 9.00   NOK 11.27
One barrel brent crude oil:   $75.95     $67.26
One litre petrol at pump:     £1.219     £1.120
One pint organic milk costs:  £0.53      £0.60
Price of gold (1 troy oz)     £804       £782
Nationwide house price index: £167,802   £189,454
Halifax house price index:    £168,202   £192,970
Unemployment:                 1.43m      1.86m
Average earnings:             £23,348    £25,220

How would we think about these numbers had we known them five years ago?  Well the national debt would be a horror, and the deficit was supposed to be zero by now. No-one really expected the lowest ever base rate of 0.5% to stick for so long, and not surprisingly house prices have run out of control.

But the fall in the oil price would be a pleasant surprise, as would the increase in sterling against various foreign currencies. The Swiss franc is notable here for its value retaining properties. Gold would have been a bad investment (although it has peaked much higher in the intervening years) but equities were good, amounting a 5% approx gain per year. The inflation number would have seemed like an amazing achievement, but it's just a blip and has been higher during the course of the five years.

The numbers can be summarised as "feel good" but actually bad. Most of the gain has been bought at the cost of an enormous increase in the national debt. On the down side unemployment is up and salary growth is subdued at best, an 8% increase of over the five years compared with an 11% increase in the cost of living (CPI).

In other news, this time five years ago we were troubled by volcanic ash clouds from Iceland, a BP oil leak in the gulf of Mexico and Greece failing to pay its debts. Of these only Greece remains topical and we are exercised by ISIS in Iraq, a Saudi vs Yemen war and blacks rioting in Ferguson Missouri and Baltimore.

To sum up the government of the last five years - they didn't really fix anything.


Anonymous said...

> Price of gold (1 troy oz) £804 $782

I think you mean £782 ?

Nationalist said...

You're right.