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2000-2010 - a vintage decade

Despite the economic turmoil of 2008/9, new research released by Penfolds reveals the noughties were in fact the best decade of the last 50 years and 2004 was the vintage year of the decade.

These results are just some of the findings revealed in the Penfolds Vintage Years Report which looks at the last half century in the UK economy and identifies which years can be considered ‘vintage’ based on a selection of quantitative criteria.

Commissioned by the iconic wine brand, Penfolds, the report was inspired by parallels in the wine world, where some years stand out as stellar vintages because the ingredients for success all align.

Using a uniquely created research model, each year of the last half century was given a Penfolds Vintage Years (PVY) score that demonstrated the success of the year in economic terms and ranked each year, and in turn each decade, based on their success. The key components identified to make a vintage year are economic growth above 2.8%, low unemployment, a rise in gross national disposable income of 1.7 points or more, RPI inflation below 5%, a widening tax base and profitable companies.

So, whilst the noughties tops the research as the best decade and 2004 steals the crown for the best year on record, the Penfolds Vintage Years Report shows that every decade has at least one vintage year;

- The two highest-scoring Penfolds Vintage Years were in the middle of the noughties boom, 2004 and 2003. 2004 experienced stable economic growth of 3%, unemployment of 4.8% and record business profitability. Downsides are apparent in qualitative factors; there wasn’t a lot of sun, crime was high, and the aftermath of the Iraq invasion, but overall 2004 scored highest on the PVY Indicator.

- 2003 was sunny for the economy and sunny outdoors. Home ownership was at its highest level ever (70.9%) and England won the Rugby World Cup. The "dodgy dossier" and the preparations for the war in Iraq dominated bad news, but at the beginning of 2003 the nation didn't know that, and in terms of the PVY Indicator “we'd never had it so good”. This is the only time the UK has experienced two vintage years in succession.

- In 1997 the stock market was booming (LSE market capital was up 21%), inflation was at 3.1%, the economy expanded by 3.3% and crime figures were low. It also saw the birth of New Labour and Harry Potter.

- In the 80s, 1988 stands out as even better than most years in the noughties boom. Unemployment fell by 2%, the economy grew by 5%, and the rise in disposable income was the third-best over the last half century.

- Despite the 1970s being the least vintage decade – it scores lowest overall in the PVY Indicator – 1972 and 1973 are identified as vintage years with low unemployment rates (4.5% and 3.8% respectively), increases in gross national disposable income (1.7 points and 2.5 points) and economic growth (3.7% and 7.2%).
- The 1960s was a vintage decade with an unbroken succession of strong years, and 1964 stands out as its vintage year with 5.5% economic growth, low unemployment and the birth of Beatlemania.

The Future? The Penfolds Vintage Years Report indicates that 2010 will be better but not without its challenges: but it will be an improvement on 2009 which is set to be one of the worst years on record. 2015 is set to be the next vintage year, whilst not returning to the boom of 2003/4, the best predictions indicate the worst effects of fiscal tightening will be behind us, and growth will have resumed giving 2015 the right ingredients for success and being the next vintage year to remember.

And The Worst? The Penfolds Vintage Years Report also measures the poor vintages, and 1974, 1980 and 1981 are the three worst-scoring years on the PVY Indicator before 2009. 1974 had a recession, the three day week, runaway inflation, the oil crisis and two elections, which made it even worse than 1980 or 1981. In those years the UK experienced another recession, high unemployment and less disposable income.

David A Smith, author of the Penfolds Vintage Years Report and Chief Executive at Global Foresight and Futures comments: “It doesn’t seem like it now, but the noughties really is the vintage decade of the last 50 years, and in 2003 and 2004 we’d never had it so good! The Penfolds Vintage Years Report celebrates the vintage years in the UK economy, where much like a fine wine, all the ingredients for success align to create a year that is truly vintage.”