1938 pounds now thrown in the bin | economics news at abelard.org

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## <!-- google_ad_client = "pub-7387454084211988"; /* linx news */ google_ad_slot = "0126975310"; google_ad_width = 728; google_ad_height = 15; //--> a pound is now worth threepence - a story of twelve-sided inflation

A 2018 pound and 1938 threepenny bit are worth about the same.

Eighty years apart, both the same size, and buying the same amount. The modern coin is fancier, but the old one cost me five times as much, and is a stronger design.

In 1938, the twelve-sided threepenny bit was worth three (old) pennies. Then, there were 240 pence (pennies) to a pound.
Now, the new twelve-sided pound coin is also worth about three 'old' pennies, with a pound having 100 (new) pennies.

Inflation in the intervening decades has diminished the pound's value so it is worth about an eightieth (1/80) of a 1938 pound.
[The British currency was 'decimalised' in 1970, so a pound was made up of 100 new pennies. Thus, a new penny is nominally 2.4 'old' pennies.]

According to the Office for National Office, £5 worth of shopping in 1947, would cost £100 in 1997 (or 5p worth of shopping would now cost £1 over that period, that's only 1/20).
[5p or 5 new pence are nominated to 12d or 12 'old' pence - one shilling.]
Note that this is a shorter period than the time span for the two coins above, where 3d (threepence) worth of shopping in 1938 would now cost £1.

### 1938 pounds now thrown in the bin

October 2018 update - There is now discussion of taking the one new penny coin and the two new penny coin out of circulation.
That is, the end of a coin nominated at less [2.4d] than the old three pence coin [3d] and a coin nominated at more than [4.8d] the old three pence coin.

This is equivalent to taking the 1938 pound, and more, out of circulation because it has now become worth so little.

I wonder when the old five pounds (£5) will be taken out of circulation and replaced with a photograph. In 1938, £5 was worth more than an ordinary person's weekly wages.

"In the normal course of the cash cycle, many denominations fall out of circulation, for example, by being placed into savings jars. Surveys suggest that six in ten 1p and 2p coins are used in a transaction once before they leave the cash cycle. They are either saved, or in 8% of cases are thrown away. To meet demand created by such losses from circulation, in previous years the government and the Royal Mint have needed to produce and issue over 500 million 1p and 2p coins each year to replace those falling out of circulation."
[Quoted from assets.publishing.service.gov.uk]

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