My memories of 1981 are of a great year, full of discos and Greek sunshine and friends. That was not the case for many others, who’ll remember riots on the streets of many a city, soaring unemployment and misery, particularly in the then-industrial north. 1981 was also the last time inflation hit 11%, although then it was kind of good news, as it was ‘tumbling’, to use headline-writer vernacular, rather than soaring to that level. Mrs Thatcher, for whom, yes, I had voted in my first election three years before, was one of the first to use the blunt but, as it turned out, effective for a while, weapon of interest rates and monetary policy to ‘conquer’ inflation. It worked, but at great human cost and with a polarised country. The Bank of England is likely to wield the interest-rate sledgehammer again, and some will no-doubt say ‘if it ain’t hurting, it ain’t working’. Something only ever said by those not being hurt. As a rule.
“The true impact of inflation on cash savings and pensions”
Leaving your money in the bank or building society has always meant that its ‘real value’ after inflation will go down. Although rates go up to, supposedly, control inflation, any chart you look at will show that, apart from a few very short-term blips (N Lamont, I’m looking at you) they are never more than inflation.
