Comment: Our personal wealth has special properties

NOW we know why last month’s retail sales volumes were much higher than expected – we’re each worth an average of £114,000.

Gareth Mackie

That’s the conclusion from the Office for National Statistics (ONS), which says the total net worth of the UK stood at a record £7.3 trillion at the end of last year.

The bulk of that sum – some £4.2bn according to the ONS number-crunchers – is made up of property owned by households and “non-profit institutions serving households”, such as charities, churches and universities.

Statisticians tell us that property has steadily risen in value over recent years, except for a fall in 2008 as the credit crunch hit hard, and now accounts for 55 per cent of the value of households’ non-financial assets.

Before rushing out to celebrate, we should remember that wealth is not spread evenly across the population. Economists at Lloyds TSB Private Banking point out that the wealthiest 10 per cent of households hold 22 times more wealth, on average, than those in the bottom half.

Including the effects of inflation, the ONS estimates that the UK’s total net worth more than trebled in the 25 years to 2012, but the rise in property values hides some uncomfortable truths for Chancellor George Osborne.

Although the UK government owns “fixed assets” such as buildings and machinery worth more some £327.5 billion, its financial liabilities have been creeping ever higher and totalled £1.5tn at the end of 2012.

A lack of any significant economic recovery last year meant the government had to issue more bonds to cover public spending, the ONS said, “increasing its total liabilities and causing its net wealth to decline”.

Despite an increase in the value of its buildings, the government owes far more than it owns, and its balance sheet has been stuck in the red for the past two decades. At the end of 2012, central government’s total net worth was minus £830.4bn, some £52.2bn weaker than the previous year.

The recent raft of positive news from the services, construction and industrial sectors has boosted hopes that the economy, which grew 0.6 per cent in the second quarter, is set for further expansion in the coming months.

Osborne needs all the help he can get to turn the public finances around, but if he wants a lesson on balancing his books, he could do worse than asking the nation’s households for advice.

New technologies put 3D films back in focus

Rumours of the death of three-dimensional (3D) movies appear to have been greatly exaggerated, judging from Cineworld’s latest results.

Although the number of releases has fallen, it seems that more film-goers have been persuaded to don their glasses and stump up higher ticket prices to enjoy some 3D thrills.

Warner Brothers’ 1953 horror film House of Wax was the first colour 3D movie with stereo sound, and 30 years later other horrors such as Jaws 3 and Friday the 13th Part 3 sparked renewed interest in the format.

However, the rise in home video, and then DVD and blu-ray, seemed to have killed it off, until the 2009 release of James Cameron’s Avatar.

Other film-makers jumped on the bandwagon, but the dim and fuzzy results left many viewers distinctly underwhelmed, prompting some in the industry to predict 3D was doomed.

But Cineworld says studios are becoming “increasingly adept” at discerning their target audience, and recent titles such as Disney’s Planes show how far technology has come.