Why a pint of beer will probably cost you £11.50 – and a loaf of bread £4.20 – by the year 2040

You probably don't need to panic, though

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The Independent Online

The price of a pint of beer is set to hit £11.50 by 2040, according to financial analysts at Lloyds bank.

The experts analysed pricing data between 1914 and 2014 for a basket of goods, including the humble pint.

The price of a loaf of sliced white bread would be £4.20, up from its current price of £1.35.

A dozen eggs would cost £6.02 if prices increased at the same rate as they had done for the previous 25 years.

Most items would be two to three times more expensive than today in nominal price terms.

The projections are unlikely to be totally accurate because different factors could affect price level of the economy, including oil shocks or a change in economic orthodoxy.

 

The mid-20th century was characterised by high inflation and lower unemployment, but since the 1980s higher unemployment has been tolerated in order to keep inflation lower.

The CPI inflation index is currently 0.3% - well below the Government’s 2% target.

This means prices are rising more slowly than usual, but it also risks the economy falling into what economists call a “deflationary spiral”.

In the past wage rises have tended to keep pace with price rises over the long-term, so these price rises are unlikely to be of any real consequence to consumers.

A spokesman for Lloyds bank said: "The average price of a pint has grown a staggering 294 times over the past 100 years, from an average of just 1p."

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