Consumer price inflation, UK Statistical bulletins

Price indices, percentage changes, and weights for the different measures of consumer price inflation.

Inflation calculator

The calculator uses Consumer Price Index (CPI) inflation data from the Office for National Statistics from 1988 onwardOpens in a new window. Monthly calculations of the current year are based on the latest CPI level, whereas previous years use their calendar year averages. CPI estimates before 1988Opens in a new window are modelled based on data collected for the Retail Price Index (RPI).

The calculator uses the Consumer Price Index (CPI) as this is the measure used by the Government to set the Bank of England’s target for inflation. An alternative credible measure, which is the ONS’s lead measure of inflation, is the Consumer Price Index including Owner Occupiers’ Housing Costs (CPIH).

How the inflation calculator works

Our inflation calculator works for amounts between £1 and £1,000,000,000,000 (£1 trillion).

For example, imagine you want to know what goods and services costing £23 in 1975 would have cost in 1985:

The price index for 1975 = 17.78
The price index for 1985 = 44.6

The calculator increases the cost in 1975 by the change in prices between 1975 and 1985 with this formula:

Cost in 1985=Cost in 1975×1985 price index1975 price index

£57.68=£23×44.617.78

So the cost in 1985 of the same goods and services has risen to £57.68.

Average inflation

The inflation calculator also tells you the average yearly inflation rate between two years or months (current year only). The formula for this, again using the example of 1975 to 1985, is:

Average inflation=(((1985 price index1975 price index)0.1)−1)×100

The answer is:

9.6%=(((44.617.78)0.1)−1)×100

This looks a bit complicated, but it just shows that on average prices rose by 9.6% a year between 1975 and 1985. By the way, “0.1” means that the change in prices is ‘raised to the power of one tenth’ to calculate the average inflation rate over ten years.

Deflation

If prices fell between the two years you put into the calculator, average inflation will be negative. This is called deflation.

For example, say you input the dates 1920 and 1933. The calculator reveals that inflation averaged -3.5%, because prices fell in almost every year between 1920 and 1933.

How we created our calculator

Our inflation calculator is designed for illustrative and general reference purposes only.

The calculations are approximate and only give a rough guide to the buying power of the pound for goods and services purchased in the UK.

We use several sources to create our calculator. For dates from 1750 until 1948 we use the Office for National Statistics’ (ONS) Composite Price IndexOpens in a new window. Before 1947 no single price index exists so the ONS use price data linked together from several different published sources. We use the ONS’s estimates of the Consumer Price IndexOpens in a new window from 1949 onwards, which we use to update our calculator each year.

For dates between 1209 to 1750, we use the cost of living indexOpens in a new window kindly supplied by Professor Greg Clark.

There are a number of other price indices available. You can find some alternatives in our A millennium of macroeconomic data spreadsheet and Professor Clark’s study The Macroeconomic Aggregates for England 1209-1869Opens in a new window.

The website measuringworth.comOpens in a new window has a calculator based on different measures of comparative value such as the Gross Domestic Product (GDP) deflator, average earnings, and GDP per head. These measures may be more useful depending on what you’re trying to do. For example, a calculator based on average earnings might be better if you want to compare wages, income or wealth over time.