UK living standards outstrip US

rom The Sunday Times

January 6, 2008

UK living standards outstrip US

Living standards outstrip those across the Atlantic for first time in over a century

David Smith, Economics Editor

LIVING standards in Britain are set to rise above those in America for the first time since the 19th century, according to a report by the respected Oxford Economics consultancy.

The calculations suggest that, measured by gross domestic product per capita, Britain can now hold its head up high in the economic stakes after more than a century of playing second fiddle to the Americans.

It says that GDP per head in Britain will be £23,500 this year, compared with £23,250 in America, reflecting not only the strength of the pound against the dollar but also the UK economy’s record run of growth and rising incomes going back to the early 1990s.

In those days, according to Oxford Economics, Britain’s GDP per capita was 34% below that in America, 33% less than in Germany and 26% lower than in France. Now, not only have average incomes crept above those in America but they are more than 8% above France (£21,700) and Germany (£21,665).

“The past 15 years have seen a dramatic change in the UK’s economic performance and its position in the world economy,” said Adrian Cooper, managing director of Oxford Economics. “No longer are we the ‘sick man of Europe’. Indeed, our calculations suggest that UK living standards are now a match for those of the US.”

Although many people will be surprised by the figures, Americans have long complained that average incomes have been stagnant in their country. One often-quoted statistical comparison suggests that in real terms the median male full-time salary in America is no higher now than it was in the 1970s.

Oxford Economics says that while the comparisons are affected by sterling’s high value against the dollar, they also reflect longer-term factors. “The UK has been catching up steadily with living standards in the US since 2001 – so, it is a well established trend rather than simply the result of currency fluctuations,” its report says.

It concedes, however, that a significant fall in the pound against other currencies would push Britain back down the ladder. It has assumed an exchange rate of just over $2 for the purpose of the calculation but in recent days the pound has slipped below that level.

The Oxford analysts also point out that Americans benefit from lower prices than those in Britain. With an adjustment made for this “purchasing power parity”, the average American has more spending power than his UK counterpart and pays lower taxes. (In the run-up to Christmas many Britons travelled to New York and other American cities to take advantage of the strength of sterling against the dollar and those lower prices.)

However, the British typically have significantly longer holidays than Americans as well as access to “free” healthcare.

The figures may be of small comfort to Britons worried about house prices and facing a severe squeeze on their incomes this year as a result of record petrol prices and rising energy bills.

Citigroup, which was the most accurate forecaster of Britain’s economy last year, predicts the slowest rise in consumer spending this year since 1992.

“After the credit-fuelled boom in domestic demand and asset prices, the UK economy now faces a hangover, with slowing credit growth, falling property prices and tightening lending standards,” said Michael Saunders, its UK economist.

Last week oil prices hit $100 a barrel, presaging a rise in petrol and diesel prices on the fore-courts. Npower, Britain’s fourth biggest energy supplier, announced that energy prices would go up sharply, raising the prospect of the average household bill rising above £1,000 for the first time.

America overtook Britain economically in the final years of the 19th century, during the so-called second industrial revolution, which brought mass manufacture and sharply rising prosperity to the United States.

調查：平均生活水準 英首次超越美

【中央社╱倫敦六日專電】 2008.01.07

根據英國知名企業顧問公司的最新報告，英國今年平均每人國民生產毛額預估將達二萬三千五百英鎊（約新台幣一百五十三萬元），美國則約二萬三千二百五十英鎊（約新台幣一百五十一萬元），這將是自十九世紀以來，英國生活水準首次超越美國。 「牛津經濟顧問公司」（ Oxford Economics Consultancy ）報告指出，英國平均每人國民生產毛額領先全球，不僅因為英鎊匯率走強，同時是一九九零年代初以來，英國經濟持續擴張，民眾收入增加使然。 法國與德國今年的每人平均國民生產毛額分別是二萬一千七百英鎊（約新台幣一百四十一萬元），及二萬一千六百六十五英鎊（約新台幣一百四十萬八千元）。 牛津經濟顧問公司總經理古柏表示，過去十五年英國的經濟表現在全球經濟有重大改變，英國不再是「歐洲病夫」，「事實上，英國的生活水準已經和美國並駕齊驅」。 雖然英鎊兌美元匯價走升，是英國生活水準超越美國的重要原因，不過牛津經濟顧問公司認為，自二零零一年以來，英國的生活水準持續追趕上美國的腳步，是不爭的事實。 不過在購買力方面，由於美國物價較低，稅率也不高，分析師指出，美國民眾的實際購買力高於英國民眾；不過英國民眾的年休假較多，同時有公立免費醫療保健服務，福利優於美國。