History never repeats itself but, economically, it’s sometimes possible to detect common strands. Take, for example, the following developments: rising inflationary pressures; big increases in energy prices; a war on foreign soil; even bigger increases in energy prices; and a fast-developing cost of living crisis. Sounds familiar? Well, that’s what happened in 1973.
Inflationary pressures had been building for quite some time. Already, a wage-price spiral was emerging. The Yom Kippur War triggered the OPEC oil embargo, designed to punish economically those Western nations seen to be supporting Israel. The oil price quadrupled within a matter of weeks. My parents were issued with petrol ration books (even if, in the event, the coupons were never required). Households were told to stop using “non-essential” appliances, including electric toothbrushes. Frequent power cuts meant that homework was often completed in candlelight. Edward Heath, the then-prime minister, introduced the Three Day Week, possibly the death knell for his time in office.
