UK Has Higher Standard of Living than US?

According to The Telegraph, the standard of living in Britain now exceeds that of the United States.

"Analysts at the respected Oxford Economics consultancy say that increasing incomes, free healthcare and longer holidays make the average Briton better-off than his or her US counterpart.

They predict that gross domestic product (GDP) per head in the UK, an indicator of average incomes, will be £23,500 in 2008, compared with £23,250 in America, reflecting the strength of the pound against the dollar and the steady growth of the British economy.

Adrian Cooper, managing director of Oxford Economics, said: "The past 15 years have seen a dramatic change in the UK's economic performance and its position in the world economy.
"No longer are we the 'sick man of Europe'. Indeed, our calculations suggest that UK living standards are now a match for those of the US.

"The UK has been catching up steadily with living standards in the US since 2001, so it is a well-established trend rather than simply the result of currency fluctuations."

However the average British person may not feel richer than their US cousins as goods and services there are often vastly cheaper. So, despite earning less, the average American can buy more.

The report authors also warn that a significant fall in the pound against other currencies could push Britain back down the ladder."

A close reading of this report suggests the Brits are confusing GDP with standard of living. If Americans have fallen slightly behind in per capita GDP but enjoy a considerably lower cost of living, then I think it's the Americans not the Brits who have the higher standard of living.