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How did the UK economy change during the second Elizabethan age?

The UK today is very different from when Queen Elizabeth II came to the throne in 1952. But there is one striking parallel between the start and end of the second Elizabethan age: then as now, it was a time of high inflation and widespread concerns about the cost of living.

When Queen Elizabeth II acceded to the throne in 1952, the UK was still in its post-war rebuilding phase. Rationing for most food products had just ended, with tea being de-rationed in September 1952 and meat only being de-rationed in 1954.

The currency had yet to go through decimalisation and computers were human beings who did complex computations.

In this article, using a contemporary lens, we review how the UK economy has been transformed since 1952 – and where one or two things don’t seem to have changed much.

Table 1: The UK economy, 1952 versus 2022

Population (million)50.468.3
Real GDP per capita (£)7,53332,555
Life expectancy (years)69.281.7
Infant mortality (per 1,000 live births)29.13.4
National debt/GDP (%)165.194.9
Unemployment rate2.43.8
Men at university (000s)781,178
Women at university (000s)231,569
Dollar/sterling exchange rate2.801.16
Energy from coal (%)88.56.5
Coal mine employees (000s)7161
Consumer prices index (%)10.710.1
Bank of England rate (%)4.01.75
Top 1% wealth share48.521.3
Sources: Bank of England; Higher Education Statistics Agency; Office for National Statistics; Mitchell, 1988; Turner, 2010; World Inequality Database.
Notes: Where data for 2022 are not available yet, data for 2021 are used.

The health and wealth of the nation

The UK economy has grown by 332% over the past 70 years as measured by real GDP per capita. Therefore, in purely material terms, UK citizens in 2022 are much better off than in 1952.

The increased wealth of the nation is also more evenly distributed than it was in 1952. For example, the top 1% of wealth holders then held nearly half the wealth. Today, that figure is close to 20%.

As can also be seen from Table 1, life expectancy has dramatically improved over the past 70 years. In 1952, the average man died about three years after retiring. Today, life expectancy in the UK is nearly 82, on average.

Infant mortality, another indicator of improved health, has fallen from 29.1 deaths per 1,000 live births to just 3.4. These improvements in life expectancy and infant mortality have their origins in improvements in healthcare provision, better nutrition, reduced pollution and developments in pharmaceutical and medical technology.

Ultimately, the increased wealth of the nation has been a fundamental driver of these improvements in health outcomes. The National Health Service, created just four years before the coronation, has played an important role in providing universal access to healthcare and therefore to these improvements.

The rise in life expectancy has created difficulties for both the government and employers when it comes to pension provision. The National Insurance Act of 1946 set the state pension age for men at 65 and women at 60. Employers and pension schemes quickly followed suit.

These retirement ages made economic sense in 1952, but as people have lived longer, the cost to the state and the burden on pension schemes has meant that state retirement ages have been creeping upwards. Employers have dealt with increased longevity by moving away from defined benefit pension schemes over the past couple of decades.

End of growth?

The increased GDP per capita of the UK since 1952 has largely come as a result of improvements in productivity. Productivity in the UK enjoyed a halcyon period of growth in the 1950s and 1960s.

This slowed somewhat after the 1970s and into the 1990s. But since the global financial crisis of 2007-09, UK productivity growth – and hence economic growth – has been at its lowest rate in 250 years (Crafts and Mills, 2020).

So, is this unprecedented fall in UK productivity growth temporary or permanent? If it is the latter, then this has major consequences for policy-makers who have operated in a world of economic growth for decades.

Economic historians suggest that the UK’s low productivity in recent years has been the culmination of an adverse set of circumstances – the worst financial crisis in the country’s history, Brexit and the weakening impact of information and communications technology on productivity (Crafts and Mills, 2020).

Indeed, the productivity growth that the UK has enjoyed since 1952 can be largely attributed to the technological revolution of the computer, which had transformed business practices by the 1990s, and then the internet, which transformed commerce.

The recovery of productivity growth, and the performance of the UK economy, will largely be determined by whether there is another technological revolution.

Techno-pessimists argue that the effect of innovation and new technologies, such as artificial intelligence (AI) and nanotechnology, on productivity and economic growth will be much less than it was in the past (Gordon, 2016). In other words, the 2020s will not repeat the productivity growth witnessed in the 1950s and beyond.

On the other hand, techno-optimists argue that productivity growth in the early years of general purpose technologies such as AI is underestimated (Brynjolfsson et al, 2020).

The UK’s poor productivity performance may be exaggerated because GDP is not a great measure for the new digital age. Some argue that the mismeasurement of GDP arising from the digital revolution means that we are likely to be underestimating productivity growth (Coyle, 2018).

Environmental sustainability

GDP is not everything (Coyle, 2016). It fails to take account of natural capital – the environment. A nation’s GDP may be soaring, but it may come at a great environmental cost. So, has the UK’s economic performance come at the expense of environmental degradation?

In early December 1952, the Great Smog of London hit the capital for five days. A combination of unusually cold temperatures, fog and a lack of wind combined with pollution from coal fires and coal-fired power stations to create possibly one of the most severe smog episodes that London has ever experienced.

The smog caused severe respiratory disease, which contributed to the death of approximately 12,000 people and 100,000 people falling ill (Stone, 2002; Bell et al, 2004). It also had long-term health effects on children in utero and new-born infants (Bharadwaj, 2016).

Recent research means that we know that coal pollution had major negative effects on the economy. Coal pollution in the UK had major adverse effects on infant mortality and child development (Beach and Hanlon, 2018; Bailey et al, 2018). The industrial use of coal also had a major negative effect on employment growth in UK cities between 1851 and 1911 (Hanlon, 2020).

The Great Smog was instrumental in the passage of a series of clean air acts, which sought to replace coal fires with alternative forms of heating. 1952 was the apex of employment in the coal industry. As can be seen from Table 1, nearly three-quarters of a million people (mainly men) were employed in coal mining in 1952. By 2022, less than 1,000 were employed by UK mines. Coal went from supplying 88.5% of the country’s energy needs in 1952 to about 6.5% in 2022.

Cost of living crisis

Before we leave our retrospective look at 1952, one striking parallel in Table 1 is that inflation in 1952 was as high as in 2022. In other words, it appears that some things have not changed about the UK economy.

High inflation in 1951 and 1952 was attributable to a boom in world commodity prices caused by an inventory build-up in advance of the Korean War (Dow, 1998; Radetzki, 2006). The end of that conflict in 1953 ushered in a period of low inflation and stable commodity prices until the 1970s.

The parallels with 2022 are remarkable. A post-pandemic boom and the Ukraine war have pushed commodity prices to high levels, feeding into inflation. This historical analogue might suggest that inflation will fall rapidly next year.

But unlike in the early 1950s, the inflation of 2022 has been preceded by government largesse to help the economy to recover from the pandemic. This might mean that high inflation will not be as transitory as we may wish.

We must hope that high inflation will be brought under control in the early days of King Charles III. But if policy-makers repeat the mistakes of the 1970s, high inflation might only be tamed in the reign of King William V.

Where can I find out more?

Who are experts on this question?

  • Stephen Broadberry
  • Nick Crafts
  • Diane Coyle
  • Jagjit Chadha
Author: John Turner, Queen’s University Belfast
Editor's note: This is an update of the article Platinum Jubilee: how has the UK economy changed over the past 70 years?, first published on 1 June 2022
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