Monday, January 07, 2008

You read it here first

Some economic thinktank has woken up to the old news that measured in a common currency using the market's exchange rate UK GDP per head is higher than US GDP per head. It's reported (correctly) here and (incorrectly) in the Observer, which I can't find the link for now. Update: Oh dear the Telegraph's is the worst of them all.

The figures are not wrong, I've been banging on about this myself for a long time (see links below), and there are reasons to prefer either PPP or market exchange rates, but you need to be careful not to assert things about 'living standards' if you are using market exchanges rates, as they definitely don't describe that for countries that have not too dissimilar spending habits.

http://fistfulofeuros.net/afoe/political-issues/its-expensive-but-were-rich
http://www.matthewturner.co.uk/Blog/2007/07/british-higher-dollar-income-per-head.html
http://www.matthewturner.co.uk/Blog/2007/07/it-keeps-rising.html
http://www.matthewturner.co.uk/Blog/2007/11/getting-richer.html

It won't last, as I've been banging on about for almost as long. Larry Elliot sets out a case for a weaker pound.

Labels: ,

posted by Matthew @ 1/07/2008 08:20:00 AM Comments: 0

Wednesday, July 25, 2007

It keeps rising

Not the water, which now seems to be affecting Oxford, but the pound. A few weeks ago I noted that on current trends UK GDP per head measured in any currency in the world would be higher than that of the US, perhaps for the first time since 1880.

The dollar then was trading at 2.03 and a bit to sterling, and today it is around 2.06. So there's no question now that UK GDP per head is higher than the level in the US. In fact, and I'll have to look this up, I think it must be in the top 5 or even 3 in the world.

Alistair Darling is truly a remarkable man.

I also think it can't go on much more. I have a US dollar bank account, which apparently does commission free transfers from sterling to dollars (the sting is if you then try to get it out in sterling I think, but haven't looked too closely) and I've decided to try my hand at currency speculation by depositing some money each week. We shall see - I tried this with all of £50 back in 2002, when it was 1.9 to a pound, and now have about £45 in there.

Labels: ,

posted by Matthew @ 7/25/2007 07:24:00 AM Comments: 4