SO, it’s Royal Wedding week – how exciting! I have decided to become a Royalist this week because we all get an extra day of holiday to celebrate Kate and Wills’ big day on Friday. Who cares if UK economic output suffers further as a result?
Last week I was temporarily a staunch Republican as I looked at how my net pay is going one way (down) and my daily costs are going the other way (up) as fiscal tightening and global inflation combine to hit my personal balance sheet yet again. Still, we’ll be popping open the champers on Friday to celebrate the happy occasion, even if we’ll be passing off sparkling wine as the real stuff.
How different or similar were things thirty years ago when we last had a big Royal Wedding?
In many ways, it was the same old story in 1981, as Charles and Diana were tying the knot. The UK was again in a tough financial pickle; we had a Conservative government trying to sort out the economic mess; and, as now, we had inflation problems.
That said, inflation is not exactly runaway just yet. The Bank of England may be relaxed about the retail price index rising by 5.3 per cent and the favoured consumer price index (CPI) at four per cent, double the target.
However, compared with 1981, when UK CPI was standing at 11.9 per cent having hit 18 per cent in 1980, things don’t look quite so bad. Incidentally, you may be interested to know that the Bank of England interest rate stood at 15 per cent by the autumn of 1981. That kind of rate today would make my mortgage tracker look a little nasty.
Another wretched link to 1981 came a couple of weeks ago when we found out that last year we suffered the first drop in real incomes since that year.
In 1981 Geoffrey Howe was doing pretty much what George Osborne is doing now: polarising the economic and academic establishment with harsh medicine to correct an economy which had become dangerously unbalanced. The debate still goes on after thirty years as to whether his Budgets in the early 1980s made the unemployment problem worse in the short to medium term. Back then unemployment hit 2.5m in 1981.
Thirty years ago will also be remembered for riots in Brixton and Toxteth; Greenham Common peace campaigners; and the firebrand Ken Livingstone in charge of the GLC.
Perhaps one of the most polarising figures of 1981, after Lady Thatcher herself, was Norman Tebbit.
I’ll leave you with his most memorable quote of the year. Maybe it is just as apt today: “I grew up in the thirties with an unemployed father. He didn’t riot. He got on his bike and looked for work and he kept looking until he found it.”
Steve Sedgwick is an anchor on CNBC