UK’s 1981 Economy
Things were pretty bad economically 30 years ago just before Charles – probably somewhat regrettably – said “I Do” to Diana. But according to a recent study comparing the economics of the time between the two royal weddings spanning the last three decades, things for Britain’s economy were “beginning to turn a corner,” with GDP increasing 1.4 percent in the first quarter of 1981 “signaling the beginnings of a multi-year period of economic expansion associated with tax cuts, yuppies, striped shirts, eyeliner (for men), Madonna and Liverpool FC.”
The wedding took place following the UK 1981 budget announcement. The country’s chancellor, Geoffrey Howe, made a huge “fiscal squeeze” smack in the middle of a tough recession and he was criticized widely for this as the economy was already in a fragile state.
And even though at the time of Charles and Di’s nuptials the economy did seem to be getting a bit better, there were still many who weren’t reaping any benefits since unemployment continued to escalate until four years later and the gap between the wealthy and poor widened further.
Fast Forward Three Decades
So what is the case for the UK economy in 2011? Economists were impressed with Kate’s regally-relatively modest dress, in line with today’s “austere” economic times, as compared to Diana’s “flamboyant packaging, which, apparently, better captured the mood prevailing in the 1980s.”
But perhaps – in hindsight – Diana’s dress wasn’t so appropriate for the 1980 economics. Things weren’t as good as they seemed but what their wedding did was to “pretend that we were not living in a world of austerity at all. It allowed the great British public to dream.”
What we wanted from Kate and William’s wedding was the ability to dream again. We wanted it to tell us that “austerity, unlike marriage, doesn’t last ‘until death us do part.’” But part of that dream bubble was burst with the buses transporting the minor royals down the Mall, “a sign of our newly austere times.”
Nonetheless, it still cost a staggering 10 million pounds sterling. So let’s not overstate its austerity. But that was important for the worldwide public as we all still need a dream.
Today’s Economic Figures
Can we be happy with how the economy is faring today? The Bank of England most certainly can with inflation as low as it could possibly be at 4 percent. In 1981 when Charles and Di wed, retail price inflation had plummeted to 10.9 percent, whereas the year earlier it had been at 20 percent.
There is definitely room for improvement today too. We need to build up trust in markets again. We seem to have put a lot of faith in our policymakers and regulators to “get things right” for us. But it doesn’t look like credit growth will escalate in the near future. We need to try to ensure interest rates don’t keep going on up. Clearly this is an issue of tackling the deficit – and sooner rather than later, but inflationary issues can wait.
Still, we must always try and dream. There are facts and figures that can make us want to cry but there couldn’t have been a face without a smile as we saw the delightful figure of Kate Middleton in her stunningly simple and elegant dress as she approached Westminster Abbey. But good for William for trying to keep things real and simple too with his McVitie’s wedding cake. At the end of the day, it’s the simple things that will keep us going and there’s a good chance that William would have learned that lesson from his mother, who would have been so proud on Friday to see his beautiful wedding.
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