Prices in 2500% hike since 1947 (From This Is Wiltshire)

Prices in 2500% hike since 1947

2:17pm Thursday 15th December 2005 in

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Consumer prices in 2004 were around 25 times the level in 1947, according to the Office for National Statistics.

Costs rose fastest for housing over 50 times higher, with growth particularly strong during the 1970s and 1980s, exceeding 200 per cent in both decades.

The article, which looks in detail at trends in inflation from the Second World War to 2004 as measured by the Retail Prices Index (RPI), also shows strong growth in tobacco prices, particularly since 1970, in part driven by increased excise duties.

Clothing and footwear experienced the smallest rise. Prices increased until the mid-90s but then fell back so that by 2004 prices were around six times greater than in 1947.

Leisure goods have also fallen in price since the mid-90s, back to their level in 1987.

This is mainly because prices of audio-visual equipment in 2004 were less than a quarter of their level in 1987, reflecting rapid technological change.

The most rapid increase in prices was in the 1970s, when prices rose by 250 per cent, with inflation reaching 26.9 per cent in August 1975, and exceeding 10 per cent in several other years. By contrast, there were several months of deflation between April 1959 and March 1960, with the inflation rate reaching a low of minus 0.8 per cent in June 1959.

The article also examines trends in housing expenditure. Food represented around one-third of household expenditure shortly after the war, compared with 11 per cent today. Tobacco is down from 12 per cent to 3 per cent, reflecting health concerns and increased taxation.

By contrast, the share of expenditure represented by housing costs has risen from around 10 per cent of the total to 22 per cent in 2004. Expenditure on transport has also grown since the Second World War, mainly due to increased motoring expenditure, from around 3 per cent to 16 per cent of total expenditure.

Changes in the pattern of household expenditure are also reflected in the RPI basket of goods and services. Among food items, there has been a noticeable trend towards convenience shopping and prepared food.

For instance, the 1950s saw the introduction of fish fingers, the 1960s sliced bread, and the 1970s cod in sauce.

Additions to the index in the last ten years or so have included frozen pizzas, chilled ready meals and chicken nuggets.

Technological change is particularly noticeable in areas such as household appliances, audiovisual goods and CDs and tapes.

The 1947 basket included just four items in these categories vacuum cleaner, iron, radio and gramophone record.

Black and white televisions were added in the 1950s, along with the electric fire and washing machine, while the 1960s saw fridges, and the 1970s the record player and cassette recorder. Since then, technological innovation has been reflected in the introduction of items such as dishwashers, personal computers, mobile phones, widescreen TVs, DVDs and digital cameras and the introduction and subsequent dropping of items such as the music centre, personal cassette player and analogue camcorder.

Increasing prosperity and leisure time is also apparent with the increasing number of items in the household services, leisure goods and leisure services groups.

Items introduced in these categories include computer games, internet subscriptions, leisure centre exercise classes, and health club/gym annual membership.

Richard George, who is a senior economist with the Milk Development Council in Cirencester, said the figures for food did not really surprise him.

"Overall people are getting a good deal with food.

"Pound for pound they are paying less for their groceries because after the war the food bill took up around 30 per cent of the household expenditure. Now, even with the availability of other foods from around the world it's only 10 per cent."