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£ Sterling (Purchasing Power)

Volume 526: debated on Tuesday 6 April 1954

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asked the Chancellor of the Exchequer in view of the fact that the internal purchasing power of the £ fell from 20s. to 19s. 2d. since October, 1951, what were the comparable figures for the previous two periods of two-and-a-half years; and how much of the recent fall is due to the increased cost of coal, gas, electricity, and transport charges.

From April, 1949, to October, 1951, the internal purchasing power of the £ on the basis used in the calculation referred to by my hon. Friend is estimated to have fallen from 20s. to 16s. 11d., or by about 15 per cent. An exactly comparable estimate for the period October, 1946, to April, 1949, cannot be made, because the Interim Index of Retail Prices was not available before June, 1947. But, taking 20s. as the average for the year 1946, the purchasing power of the £ at April, 1949, was about 17s. 4d— a fall of about 13½ per cent.Of the estimated fall from 20s. to 19s. 2d. between October, 1951, and February, 1954—a fall of about 4 per cent.— about 2d. can be attributed to increases in the cost of fuel and light and in fares.