13th February 2015
The UK may be heading for negative inflation but over the past century the cost of goods has risen almost 9,000%.
Figures from Lloyds Private Banking show price increases mean £8,970 would be needed today in order to buy the same items bought for £100 in 1914.
Similarly, this means items that cost £1.11 in 1914 would cost £100 today.
To illustrate the point further, Lloyds has calculated a price of bread has seen inflation of 11,000% over the past 100 years – costing under a penny in 1914 and costing £1.35 today.
A pint of milk cost just 1p in 1914 and has risen to 45p last year; a 6,495% increase. Those who like a tipple have been hit even harder – a pint of beer cost just 1p in 1914 but is now on average £2.94, meaning the cost of a pint has risen 29,300% in a century.
If inflation continued to increase at this rate, in another 100 years a loaf of bread would cost £150, basing future calculation on retail price inflation (RPI) of 2.8%.
Fast-forwarding into 2114, in order to buy goods worth £100 today, a person would need £1,582 to have the same spending power.
Ashish Misra of Lloyds Bank said: ‘Over the past 100 years the large increase in retail prices has substantially eroded the purchasing power of the pound. In fact, the value of money has fallen on average by just under 5% per year since 1914.
‘An individual today would need close to £90 million to have the same purchasing power as £1 million in 1914. In the current low interest rate environement it is important that savers and investors have the right information available to them toe nsure their money goes furthest for them.’