AS a frequent visitor to the UK, I have developed an innate sense of how far the pound stretches.
And, believe me, in recent times I have noticed that it stretches far, far further than the euro.
The currency conversion rates suggest that a euro will currently buy you 90p, give or take a few decimal points.
But the reality on the ground - in my unscientific but unbiased opinion - is that a euro is currently worth, at most, 50p. That’s what I would be offering you if you wanted to buy some of my sterling.
It does make you wonder: What do those financial markets know?
If you are also a regular visitor to Britain, you might play a little game with me here.
Imagine you were going for a night out in a British town and were handed £50 as spends.
Now, imagine you were going for a night out in Cork: How many euros would you want to match that £50?
€56, as the currency converter suggests? You must be joking.
For me - in all seriousness - the bidding would need to begin at €100. In fact, I reckon my £50 would still buy me more food, drink and transport in the UK than your €100 in Cork, so I would want maybe €110 or even €120 to be guaranteed the same night out.
It’s an issue that has me baffled on several fronts.
For starters, how do the markets arrive at those currency conversion rates, and why are they so out of sync with the reality on the ground?
We know that markets and currencies fluctuate depending on the strengths and weaknesses of countries’ economies, and we know that the UK has been a poor performer in that regard since the Brexit vote and the resulting political turmoil.
We also know that the markets are always looking ahead at economic trends, and will factor these into their currency values, and we keep hearing that the UK is heading for straitened times, at least compared to the eurozone.
Lately, I have been reading many stories about the weakness of the pound - but, from what I can see, it will still give you a lot more bang for your buck than the euro.
So, what’s going on?
Yes, we can blame high inflation for the decreasing value of the euro in the past year, since Russia invaded Ukraine - but high inflation is bedevilling the UK too.
In fact, inflation currently stands at 10.7% in Britain, compared to 8.2% in Ireland - yet the pound seems to be retaining its value, and the euro appears to be falling further behind.
Whenever I visit a shop in Cork now, I am astounded at how sharply prices are rising.
During the week, I nipped into a petrol station shop - hardly a place you will find a bargain, granted - but was still shocked at how swiftly €10 slipped through my fingers for three items.
I bought a four-pack of toilet roll, some butter, and a Yorkie (don’t judge me).
The cost? €10 dead.
In the UK, this should - according to the official currency conversion - be costing me £8.86. In fact, I could get those items from Sainsbury’s, a middle-ranking and not-that-cheap supermarket chain, for under £5. Branded items too, not own-brand.
The price comparisons for UK items are almost universally well below the official currency conversion rate.
How much did you pay for your Christmas tree last year? Probably around €60-70? In the UK, they were around £40.
Did you buy a load of stamps for Christmas cards? The cheapest stamp in Ireland now costs €1.25, while in the UK a second-class stamp costs 68p. If you left it a bit late over there to post out your cards, you would still only be paying 95p for a first-class stamp.
And those UK stamp prices went up sharply last year, prompting an outcry from the public. We Irish don’t do outcries over rising prices, do we?
If you sent a parcel out over Christmas, prices here start at €9, while in the UK they start at £6.
I guess I should declare that my usual visits to England are to a northern town, and prices may be higher in some cities - especially London. But from my experience, Ireland is still a rip-off republic compared to even the most expensive places in the UK.
And yes, wages here in Ireland are higher than in the UK - but, I would suggest, not by nearly enough.
The average annual wage in Ireland is €44,202, and in the UK it is £38,131, which converts to €43,034. But, as we have seen, that extra grand in Ireland will be swiftly swallowed up by the cost of living - and the rest.
Furthermore, wage growth is accelerating far quicker in the UK - at 6.4% - compared to 4.7% here, so they are actually catching up on us with their salaries.
We tend to think the UK is run by a cabal of right-wing nutters, but the minimum wage there is set to rise on April 1 to £10.42 an hour - that’s €11.76. The minimum wage here recently increased to €11.30 per hour. Now, think how much further that money will go in the UK.
This isn’t to suggest for a moment that the UK doesn’t face serious economic issues, or that Ireland is a basket case.
But, certainly, the narrative that Britain is on the rocks and Ireland is smugly sailing through difficult times, buoyed by huge Corporation Tax receipts, doesn’t stand up to scrutiny.
And it certainly underlines the point that, despite huge issues in our housing and health systems, the cost of living here remains a massively detrimental part of Irish life.
Would it be unfair to say that, in the UK, most businesses charge what they think the customer might pay, while in Ireland, many businesses charge what they think they can get away with?
Certainly, we now inhabit a country where a tenner is swiftly disposable, and, if you’re getting a round in at the bar, you prepare to have a €50 note eaten into because that €20 might not be enough.
In comparison, many businesses in the UK refuse to take £50 notes because of the fear of fakes, and the public get by happily enough without them. Imagine if the €50 note was taken out of circulation here!
This week, a new study found that almost 30% of the Irish population are struggling with the ongoing cost-of-living crisis.
The survey by the Worldwide Independent Network of Market Research stated that, of 36 countries analysed, the Irish were the most likely to have already cut back on their spending in response to rising prices. Not surprising, but not the news businesses want to hear either.
It would be fair to say that, along with housing and health, the cost of living completes the three horsemen of the apocalypse that will ultimately bring down this government.
Read More
Listen: Drum roll... I recorded a woodpecker here in Cork! More in this section
login
who are we?
contact us
qosheapp
Toi Staff
Gideon Levy
Andrew Mitrovica
Mort Laitner
Grant Arthur Gochin
Priyamvada Gopal
Poonam Muttreja
Zaher Sahloul
Patrick Gathara
Obaid Mir
visit website
