Four pints and fish and chips for £1

Two more days.

Just two more days until the pubs open.

Anticipation keeps building for a return to pub life.

But when the doors finally do open on Independence Day… how expensive will a pint be?

During the lockdown, we’ve written a little about some of the forces which have impacted the beer industry – the collapse in demand for fuel leading to a collapse in the ethanol price, leading to a collapse in the CO2 required for carbonating some beers… the closure of the pubs brutalising the hop industry…

It’ll be interesting to see if the pubs are going to try and recoup losses with higher prices when they go back online, or whether they will increase prices simply because the logistics of running one have become a lot more expensive.

I moved over to my girlfriend’s flat near Hampstead not long ago, and there are a couple of pubs there doing beer to takeaway in transparent plastic cups, of the kind you might see Starbucks drinks or milkshakes served in. I’ve discovered it’s possible to drink through the cross-shaped aperture reserved for straws without actually needing a straw, a discovery I’m certain I would not have made if it hadn’t been for lockdown.

The cost of a pint for takeaway has definitely increased since lockdown began – they’re even selling an IPA for £6.90. But I wonder if those will stick when the pub opens…

A few of you have written in and pointed to the beer price as a basic indicator of inflation, that destructive force we’ve been writing so much about recently. It’s what might drive a 70’s style inflation boom is the topic of this month’s issue of The Fleet Street Letter Monthly Alert.

One reader was reminiscing about how he used to be able to buy four pints of bitter and fish and chips with change left over for a £1 coin. Sounded like Utopia, sadly well before my time.

But then I realised, it is actually still possible to do this. Can you figure out how?

That’s 4 pints of bitter… fish and chips… with change left over in exchange for a £1 coin, without stealing, begging, or a very generous individual behind the bar. Does anyone know? Answers to

I’d offer a prize for the winner – a favourite beer of mine – though sadly the Post Office near here has recently shut down (I’m not sure if its WuFlu related or not). I’ll see if I can find a suitable replacement for our next competition…

Thank you for all your responses to my request for your experiences of inflation in the 70s. It’s been great reading them all – accounts of property prices doubling in a year seem wild today, but you can’t take low inflation for granted:

We bought a brand new 3 bed bungalow in Northants for £5,000, near enough.  Twelve months later, needing to move to Hampshire, we sold it for £10,000, near enough. We were fortunate. After sundry more moves, and without ever having much money in the bank and never inheriting wealth, we sold our house in Gozo, Malta last year for 360,000 euros, money which we didn’t actually need, since we now rent out of current regular income. Such has been the effect of being born at just the right time for the world to carry us along with it. It has been great fun trying to keep all this loot out of the hands of the bankers and giving it away to our children and all my favourite charities. Gold membership has enabled me to take advantage of the advice of the Southbank gang, which has been repaid handsomely this year, despite what you insist on calling Wuflu (horrible word)…

C’mon, WuFlu rolls off the tongue much easier than “Covid-19”! I’m pleased to hear your Gold membership is paying for itself.

I was interested to know if any of you regarded inflation as being a positive force for young people, after one reader described it as such to my colleague Nickolai.

There were a few tales of property speculation becoming a major source of income during the period:

I have 2 particular recollections of inflation during the 70s…

One was that many people were earning a second income by repeatedly buying a house (usually brand new) on as large a mortgage as they could get, doing it up, getting garden going etc. and selling quickly, 1 or 2 years later. They could make several multiples of their own capital, and could work their way up from basic semi to large detached within 10 years. All of this hugely stoked house prices. (Mortgages were very easily obtainable as banks and building societies capitalised on the interest rates.)

Much worse were the endless strikes, as unions grew ever more militant, demanding frequent pay rises to match or better RPI. You could rely on virtually nothing, public services in particular were disastrous, mounds of rubbish in black bin bags in the streets, power cuts, and eventually a 3-day week, viciously cutting just about everybody’s wages. Most people’s savings were cash (only the very well off had things like shares) and were hammered.

The nation was very close to collapse, possibly even civil war.

Like so many things, a short-term burst of inflation can seem grand, even fun, but it can get a most terrible grip from which nobody benefits.

For those with salaries that advanced with inflation, things weren’t so bad…

Got wed in 1970. Day after wedding we walked into Halifax Building Society and bought a 3 bed semi in a fairly posh suburb of South Manchester for £3750, 5% deposit and 95% mortgage. Our combined salaries would be about £1800 pa which easily met the Halifax mortgage requirement. Incidentally, I looked on Rightmove recently at house prices in that same road and they now fetch over £400,000. What chance have any young couple, first time buyers, have of affording such a house. What progress have we really made from 1970 to 2020. None!

Anyway, inflation really took off in the 70s. House prices accelerated, all prices accelerated but wages went up too. I remember receiving salary increases in excess of 20% for 3 or 4 years in a row in the mid 70s. But our mortgage, like most, was fixed interest, so our repayments became proportionally a smaller amount of our monthly income. So, for anyone with fixed interest debt, inflation is a boon if salaries are rising with inflation. But of course the 70s ended very badly for the U.K. The Nationalised industries were a huge financial drain on the economy and our runaway inflation scared off international Bond Investors so we had to go cap in hand to the IMF. Socialists always run out of OPM, other people’s money.

… but many readers shared some very grim experiences of the time:

I was born in 1959 and my first experience of state-sponsored tampering with the economy was Mr. Wilson’s devaluation in (I think) 1968. To my father’s displeasure petrol rocketed up to 3/6 a gallon (three shillings and sixpence, about seventeen and a half new pence–in itself an indictment of economic mucking-about). 

But this was nothing compared with the mayhem unleashed on 15th February 1971 when this country was forcibly decimalised without being asked whether we thought it a good thing. Overnight items which had cost 6d (sixpence, 2 1/2 new pence) doubled to 5p (one shilling). It might seem laughable, but it looked as though the price had gone down, and far too many gentle, trusting people fell for it. 

This inflationary deception and devaluation-by-stealth set the scene for the mayhem of the seventies, when prices soared by the day, and for the first time were stuck onto labels on tins and so forth instead of being printed on the packaging. The havoc wrought on a financial system already reeling from being decoupled from the London Gold Pool’s attempts to impose some sort of Gold Standard standards (if you follow me) by this curse of decimalisation has not, to my knowledge, been properly studied and evaluated. 

The seventies were a grim time to grow up, so don’t ever look at one of the most miserable decades on record through rose-tinted glasses. The damage was compounded by imposed metrication which , like decimalisation, at a stroke overturned two thousand years of British history, leaving us confused and feeling rootless… 


It hurt. I just graduated and there was no work to apply for except “experienced only” jobs I had no experience for. Lived with my very disappointed parents, made do with poorly paying occasional temporary office jobs and cleaning homes. Wished I had money to buy zero coupon bonds, but I was broke. Students smarter than me in college went to graduate school to kill time. I shopped at thrift shops, as the other stores raised prices too high for new clothes.

My colleague Charlie Morris likes to describe gold as a zero coupon bond, as it behaves (in price terms) in much the same way. If inflation returns, you’re gonna want some of the shiny stuff in your pocket – and not banknotes, as this reader describes…

Inflation was running at, I think, 24%. I was shopping in Folkestone, buying the weekly fish – dog fish, called “woof“ by the local fish monger. Cheap, affordable once a week for a family of 4 at a time when my Army salary wasn’t enough even for a shirt. I was pig-ignorant about money. A young lady was carrying out a survey, would I mind answering some questions? Certainly. If I had some spare money would I invest it in the bank, post office, bonds, unit trusts, pension funds etc etc?

“None of those” I said.

She was genuinely surprised, her survey was designed to lead you in another direction. She lowered her board and asked, “What would you do?”

I uttered the first independent financial thought of my life: “Spend it before it loses its value.”

Charlie also likes to say that gold is always in a bull market somewhere, for there’s always a government printing currency with abandon somewhere. And while inflation roared for the UK in the 70s… it went nuclear for Brazil in the 80s:

Apart from 21 February until 18 March when my portfolio was reduced by £30 thousand pounds, so far so good this year. Since then it has increased by £42 thousand to an all time high, thanks to some of the tips received from Southbank and some more active buying and selling. So, first thing, thank you!

On inflation, just to add that I spent 48 years in Brazil and lived through their period of hyperinfation, when at its peak in 1989 it reached 27,000% a year! I wouldn’t say you enjoy it, but you certainly learn how to live with it and take measures to even profit from it. When supermarkets were employing people at night to remark all the prices on goods in the store daily, you learned to stock up when you had the cash available. Never pay bills until the last day. Always leave any spare cash invested overnight. Etc.

Another reader commented on the extreme levels of inflation in South America, and shared a very interesting story of how he was tipped off in the early 70s about the coming inflationary surge from a well-connected acquaintance…

In 1972 I was warned of massive inflation coming before it got as bad as it did by my lawyer, who was making a fortune helping the Banks balance their books by finding matching Eurodollars for overnight lending between the banks, and he explained how the overnight lending was going berserk as the US had spent so much in Vietnam, and couldn’t take them all their dollars back at the Gold price as it then was so they were sloshing around in Europe. Later there were price controls, to try to keep prices in line, and I remember meeting with some people from the appropriate department at the time, who tried to stop us putting our prices up 5 or 10%, as we wanted, and we argued that as everyone else’s prices were likely to rise we needed to anticipate these extra costs. Then the Dollar/gold standard was abandoned.

Meanwhile some of the family were in South America. THAT was inflation. As recently as 15 years ago or so in Brazil the manager of a Bank in Sao Paulo, where I was changing money, was pleased to tell me that inflation had come down to 15%. ‘A year?’ I asked .’A month’ came the reply.

But all those countries had exchange controls, and had borrowed in Dollars, which they could not pay back. Anyone with money found ways to escape from the local currencies so there was always a run. The trouble now is that there is no currency to run to. We may be all right until governments cannot borrow at zero rate interest. If they are forced to push them up the that will signal the start of a rout, instead of the present trickle. Where to? Gold and crypto perhaps.

I’ll end today’s note with this letter from a reader incensed at how the system creates risk-free reward for those who own the right stuff:

… I’m so angry about the wealth that has accrued to me, courtesy of inflation rather than any individual genius on my part, that I forwarded the responses Nicolai had received to my 19 year old Grand-daughter retitling the article “this is what your generation should be protesting about”; I annotated, the various letters with my own experiences to help her relate to it.

Had I been clever enough, I’d have had a free university education at a time when it might have made a difference (less than 10% went). I had a “job for life” and a final salary pension scheme but, most importantly of all, government induced inflation enabled me to grow wealth at the expense of those who had the misfortune to be born later.

For example, in the early 70’s government policy changed to allow mortgage calculations to include the income of spouses and, hey presto, prices rocketed; our first house, bought for £4,000 in 1971 was sold 9 months later for £7,200 and by 1974 we were able to buy our current house for £23,000; needless to say its current “value” is infinitely higher. What have I, or my wife, or countless other baby boomers contributed to society that justifies such wealth? Absolutely none … bring back Henry George, and this time listen to him!

What really gets me is that society as a whole just doesn’t understand that QE, money printing, ZIRP policies et al are causing the most disadvantaged in society to suffer even more because they don’t have the capital to acquire those assets that might protect them from the ravages of inflation, yet it is those leaders who would champion the rights of such people that shout loudest for the implementation of policies such as Modern Monetary Theory … or, as I prefer to call it, modern monetary “hypothesis” … last time I looked a theory was only labelled as such when proven.

Thanks again for all your thought-provoking and insightful responses. I wish I could print ‘em all, but I’ve only so much room sadly.

Now, time for four pints of bitter and fish and chips…

Back tomorrow!

Boaz Shoshan
Editor, Capital & Conflict

For charts and other financial/geopolitical content, follow me on Twitter: @FederalExcess.

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