Shades of the 1970’s
Posted on 5th July 2022
With fuel prices soaring, war on our doorstep and even Abba back on stage, our CEO, Kevin Gray, shares his views as current media commentary compares the 2022 economic situation with the 1970’s:
The 1970s was the decade when I did my growing up and my recollections of that time are hugely positive. When I think a little more deeply about it however, there were some aspects of that decade that were challenging. If you’ve been keeping up with recent news then you’d be forgiven for thinking that we may have just been propelled back to the 1970s.
There are many aspects of today’s geopolitical world that will be very familiar to those of us who lived through the 1970s. The war in Ukraine has re-established Russia’s Cold War credentials as the bad boy on the block. Recent sabre rattling rhetoric and nuclear threats from Russian journalists appear to have been lifted straight out of the Radio Moscow propaganda playbook circa 1975. An element of Russo fear again stalks the West and some countries, especially Germany, Poland and the Baltic States, have been compelled to reinvest heavily in their defences.
The current economic situation has very obvious similarities to the 1970s. Inflation is rapidly climbing towards double digits and economic growth is exceptionally weak. The unthinkable has happened….stagflation is back and living standards are rapidly falling! All political talk is around the ‘cost of living crisis’. Not since Margaret Thatcher held up her basket of foodstuffs before the 1979 election has rising costs been such a major political issue. We have all been so used to low inflation for so long that we’d all mistakenly thought that high inflation was banished forever.
Industrial unrest is making a bit of a comeback. The rail unions are about to hold a series of strikes that will likely cripple the national rail network and the London Underground. Mass labour action on this scale has not been seen in the UK for decades. Let us all hope that employers and unions adopt a more conciliatory approach than the one taken in the confrontational days of 1970’s labour disputes.
In 1973 the Yom Kippur War lead to an energy crisis. The war in the Ukraine is doing the same now. There is already talk of having to ration scarce supplies of gas to industry this winter. Flash back to the 3-day week and the power cuts of the early 70s! What is clear though is that those on lower incomes are likely to suffer the most from higher energy bills and diabolically hard choices might have to be made this winter in some households between providing food or providing heat.
Now for some good news. We all survived the bad days of the 1970s. Economic growth did return, and wealth was again created. We will likely live through the current economic storm that is brewing and better days will return. In its 118 years of existence, Bath Building Society has experienced two World Wars, the Spanish Flu pandemic, the Great Depression, the Financial Crisis and Covid. We intend to continue focussing on improving the lives of our Members no matter what challenges we have to face next.
I have particularly fond memories of hot summers in the 1970s. I’ve just taken a look at the weather forecast and it informs me that hot weather has set in and that temperatures will reach 30 degrees before the end of the week. A 1970’s style barbeque summer is perhaps on the cards? Let’s hope so.