British Living Standards Higher Than the US?

Well, that\’s one claim, anyway:

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.

Unfortunately, it\’s tosh, as they\’re using market exchange rates. Should b using PPP, as even the authors of the report agree:

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.

Back to sleep everybody.

5 thoughts on “British Living Standards Higher Than the US?”

  1. It’s obvious that your standard of living is not just dependent on how much you earn but also on how much you can buy with it. The fact that they only reluctantly consider PPP shows that they aren’t interested in the truth of the matter, only their predetermined message.

  2. I thought it was ridiculous, and sent her a note.

    I’ve spent years banging on about this, and there are reasons to prefer market exchanges rates than PPP, but not really in the measure of average living standards, particularly between countries that have relatively similar consumption patterns.


  3. As someone has blogged elsewhere maybe we should be looking at PPP, (apologies to the but I can’t remember who), but it won’t stop Gordon and his cronies crowing about how good things are.

  4. So what they are really saying is that if we change to the american level of taxation we would have it better yes? In that case who’s with me to throwing the shower of bastards in charge out now.

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