The 1970s saw inflation and interest rates skyrocket to levels not seen since the Second World War \u2013 but was it worse than today\u2019s economic crisis? Phil Tinline investigates <\/p>
The one moment since 1945 when inflation<\/a> rose to really frightening heights was the period in the mid-1970s, when it reached 25 per cent \u2013 the highest in British history since the Second World War<\/a>.<\/p>\n The most significant fear this triggered was among those who blamed striking unions. In summer 1974, Sir Walter Walker, a retired British Army general, gathered his many scared, angry middle-class supporters into a volunteer group ready to maintain essential services and face down the expected general strike. Meanwhile, Lieutenant-Colonel David Stirling of SAS<\/a> fame set up a force called GB75, and prepared to break the power of the pickets.<\/p>\n Even milder-mannered mortgage-holders found themselves facing severe costs, as an eight per cent average mortgage rate in 1972 climbed to 11 per cent in 1974. No wonder that by the following February, the Sunday Telegraph<\/em> wrote that \u201chatred and fear of inflation have induced \u2026 a much fiercer spirit of anger and bitterness than socialism ever did\u201d.<\/p>\n During 1974\u2019s autumn election, the Conservative Shadow Environment Secretary sought to help \u2013 but was criticised for recklessly promising to push interest rates down to 9.5 per cent, through government subsidy. Who was the politician concerned? One Margaret Thatcher<\/a>.<\/p>\n Rising prices also hit those rather lower on the income scale than retired colonels. In June 1975, the Daily Mirror<\/em> declared that \u201cfor those at the bottom of the scale \u2013 the lowest paid and pensioners \u2013 inflation is a nightmare\u201d. Reportedly, 700,000 parents were going to bed hungry at least every fortnight, \u201cjust to keep their children fed\u201d.<\/p>\n However, as the Mirror<\/em> implicitly admitted, those in union jobs were getting by, because wages were rising with prices. And then there were the billions of pounds of subsidies for basic foods delivered by Shirley Williams, Labour\u2019s Secretary of State for Prices and Consumer Protection.<\/p>\n So how does all this compare with 2023? In 1974, when interest rates were 11 per cent, the Guardian<\/em> reported average house cost \u00a311,000, and monthly repayments zoomed up to\u2026 \u00a3100 a month.<\/p>\n And 48 years after the Mirror<\/em> reported on all those parents going hungry to feed their children, the same paper reported another survey, which found \u201cone in six parents go hungry\u201d to feed their kids, while others had stopped buying fruit and meat.<\/p>\n This time, high inflation has struck an economy that was already more unequal. It is striking that there have not been more visible expressions of fear like those of the aggrieved ex-colonels. But if the anxieties induced by inflation today are expressing themselves more quietly, they appear to be rather more widespread. And for the country overall, 2023 now seems even more frightening.<\/p>\nNot just mortgage holders<\/h3>\n
1970s cost of living crisis: was it worse than 2023?<\/h3>\n