For the first time in more than a century, the average Briton will be richer than the American this year. This is what data released by Oxford Economics says. By this thinktank?s projections, the UK?s GDP per capita will be ?23,500 in 2008, while the figure for the US will be only ?23,250. France and Germany, the eurozone?s two big economies, are already trailing the UK. For a country that was lagging all these economies on income-per-head, sweating to keep itself afloat in the European exchange rate mechanism, and had its central bankers chewing their nails in defence of their currency under the onslaught of a single currency investor (by the name of George Soros) barely a decade-and-a-half ago, this is truly a remarkable comeback.
If citizens of the UK do not seem to be in much of a celebratory mood, however, do not be surprised. Discretion is the better part of valour and victory. Or is it? The new data does not literally mean that Britons have better material lives than Americans now. This is about economic statistics, not necessarily about how well-off people really are. In fact, the event under discussion, the US-UK flipover in ranking, can be attributed to the relative strength of the two currencies. The US dollar has been on a downslide, while the UK sterling has gained. Otherwise, everyone more or less agrees that living conditions in America are better than on the little island across the Atlantic. A slight reversal in currency market trends could put the US ahead again. It?s just that this is unlikely to happen in the near term. This is because economic analysts expect the US to slide into recession?or perhaps a quarter or two of sub-1% GDP growth, if not contraction. The latest testimony of Ben Bernanke, US Federal Reserve chairman, has been distinctly downbeat, and President George W Bush plans a fiscal stimulus package (involving tax cuts) aimed at saving the scenario from worsening. Tax cuts have been popular in America since its Tea Party era, so they will be welcome regardless of their efficacy. Whether they can help the US edge past the UK again is not too clear either, though a century here and there between the two is no big deal, something worthy of a Bush wink at best. Can anyone even remember how many centuries have elapsed since William of Wickham founded Oxford?
