Movements in Retail Prices Since 1953

The general magnitude of the inflationary rise in prices from 1954 to 1957 is well known: an increase of about 4 per cent. per year in the all-items index of retail prices. I propose here to examine differences in price movements from one commodity group to another, in order to throw light on the nature of the inflation and on the prospects of it being stopped. In addition, now that data are available on recent patterns of consumption,' I provide some estimates of the incidence of price movements in the last few years for various broad categories of consumers. As the basis of my analysis I take the present price collections, and the corresponding index numbers of retail prices, of the Ministry of Labour. These cover a wide range of families, together making up about 90 per cent. of the total population; I shall call these index families. Strictly speaking, I can only start the price series at January, 1956, the date when the collection of prices began on the present coverage. However, making use of index numbers calculated on a rather narrower basis, and published by the Ministry in some detail between 1952 and 1956, I can carry the series back for a few years with reasonable accuracy. On the other hand, because of the lack of detail in the Ministry's published index numbers from 1947 to 1952, I can obtain only very rough estimates of comparable series before 1952.2 The period I consider is the four years from October, 1953 to October, 1957. To eliminate as far as possible the effect of seasonal movements, I take only the figures for October each year. The starting point of October, 1953 is a month when retail prices were relatively stable-the last such period, extending from April, 1953 to June, 1954. The price series are set out in Appendix I in as much detail as I use.3 It is of more than passing interest to compare price movements in 1953-57 with those in the preceding four years, from October, 1949 to Octoher 1953. This earlier neriod starting and endinc at times

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• Prices and Inequality

  John Muellbauer•The Economic Journal•1974

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