Wednesday, 12 September 2007

Impeccable logic

From the BBC's 'Have your say' on "Is the EU right to give up on 'metric Britain'?"
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"Metrication ensures prices now increase by a minimum of nine time that of sterling. If we adopt the Euro at 1.41/£ prices will increase by 35% plus 5% on food and clothing.

Robin Stowell, Bideford"
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I get the point that something that costs £1 now will cost €1.40.

Does anybody have a clue what the first sentence means?

5 comments:

Vindico said...

Firstly, how does a £1/1.40EUR exchange rate result in a 35% and 5% increase in prices? Secondly, the increase will purely be mathematical as the value remains constant although the prices have changed. So i don't get the point of the post.

Mark Wadsworth said...

V, yes of course it is nonsense, but at least I can see where he went wrong.

Nominally we would have 40% inflation, in real terms it is not inflation at all (altho' a lot of people say that going decimal sparked off inflation in the 1970s and a lot of Germans say that prices went up when they joined the Euro).

Similarly, the 5% is because other EU countries do not have a VAT zero rate for food or children's clothing (so again, this is false logic, metrication and VAT-harmonisation are two different topics).

It's the "nine times" that threw me, this is clearly wrong (as are the other two statements) but I can't even see WHERE he went wrong.

Neil Harding said...

According to the official figures inflation dropped in Germany after the Euro was introduced.

Now you could argue that the stats taken from a wide selection of goods are wrong and a few Germans that the media have carefully chosen to speak to, are right - it is of course possible. But personally I believe in the scientific method - which is why I believe in evolution despite the majority of the US public not doing so.

Mark Wadsworth said...

Neil, I doubt whether it made much difference either way. I wasn't saying it was true, I was saying that people say it, which is true.

But I do visit Germany fairly frequently, and the price of a take-away pizza and a couple of beers definitely doubled in the late 1990s (or whenever it was).

Even my teenage lads (who are lefties of course, being young) call it the "Teuro".

Penny Pincher said...

I rememebr that we were told decimilisation wouldn't affect prices but it did. Increased overnight on thousands of goods. One example: On 13th Feb 1971 butter cost 11 and 1/2d (old pennies) for a 1/2lb pack. On 14th Feb it was 1/- (one shilling the new coin equivalent being 5p)) an increase of 1/2d. [4.3% increase overnight??]All because the new coinage didn't have the equivalent to an old 1/2 penny. So goods were rounded up rather than down. I remember it well as I was a trainee hospital technician on a very tight budget.