UK standard of living drops beneath Germany’s
A few years ago Britain’s standard of living used to be the highest in the Europe Union (save for Luxembourg, which is, anyway, a bit of a statistical anomaly). Today it has dropped down beneath Germany and Austria, and looks likely to continue falling.
Eurostat measures something called Actual Individual Consumption – a calculation of how much people spend on goods and services. As you can see from the table, Britain’s AIC is 18% above the EU average. But it was 21% above it in 2009, and is on a downward trajectory while many other EU states are now on the up.
According to the ONS, AIC is often used as a measure of households’ standard of living as it incorporates all goods and services that a household consumes, including benefits in kind such as health and education.
Looking at that and the GDP per capita figures it seems clear we were spending money we didn’t have.
Even with the recent drop we still have the largest difference between GDP per capita and consumption among the major nations with most across the board having lower AIC per capita than GDP.
If the country wasn’t producing it the only way to consume it would’ve been to borrow, which is exactly what we were doing in the 00s and continue to now.
Gordon Brown, illusionist.
I think you will find that GDP measures spending but AIC also includes public services which are a better measure of prosperity. In any event, these differences are only very marginal as between northern European countrie. What is more important is the disparity in inomes between individuals, not the average. On that score the UK is a highly unequal society as compared our our Noric neighbours.