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# UK inflation rate in 1789: -1.33%

### Inflation in 1789 and Its Effect on Pound Value

Purchasing power increased by 1.33% in 1789 compared to 1788. On average, you would have to spend 1.33% less money in 1789 than in 1788 for the same item. This is an example of deflation.

In other words, £1 in 1788 is equivalent in purchasing power to about £0.99 in 1789.

The 1788 inflation rate was 4.17%. The inflation rate in 1789 was -1.33%. The 1789 inflation rate is lower compared to the average inflation rate of 2.21% per year between 1789 and 2019.

Inflation rate is calculated by change in the composite price index (CPI). The CPI in 1789 was 7.40. It was 7.50 in the previous year, 1788. The difference in CPI between the years is used by the Office for National Statistics to officially determine inflation. Because the 1789 CPI is less than 1788 CPI, negative inflation (also known as deflation) has occurred.

 Average inflation rate -1.33% Converted amount (£1 base) £0.99 Price difference (£1 base) £-0.01 CPI in 1788 7.500 CPI in 1789 7.400 Inflation in 1788 4.17% Inflation in 1789 -1.33%

### How to Calculate Inflation Rate for £1, 1788 to 1789

This inflation calculator uses the following inflation rate formula:

CPI in 1789CPI in 1788
×
1788 GBP value
=
1789 GBP value

Then plug in historical CPI values. The UK CPI was 7.5 in the year 1788 and 7.4 in 1789:

7.47.5
×
£1
=
£0.99

£1 in 1788 has the same "purchasing power" or "buying power" as £0.99 in 1789.

To get the total inflation rate for the 1 years between 1788 and 1789, we use the following formula:

CPI in 1789 - CPI in 1788CPI in 1788
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

7.4 - 7.57.5
×
100
=
-1%

Politics and news often influence economic performance. Here's what was happening at the time:

• The first ships of convicts sailing from England arrive in Australia, creating a penal colony
• Captain Arthur Phillip and British colonists lift the Union Flag at Sydney Cove, Australia. This day is now celebrated as Australia Day
• New Hampshire becomes the 9th state to ratify the US Constitution, after which the Constitution was put into effect.
• The Russian army, under the leadership of Grigory Potemkin, Occupy Ocharov

### Data Source & Citation

Raw data for these calculations comes from the composite price index published by the UK Office for National Statistics (ONS). A composite index is created by combining price data from several different published sources, both official and unofficial. The Consumer Price Index, normally used to compute inflation, has only been tracked since 1988. All inflation calculations after 1988 use the Office for National Statistics' Consumer Price Index, except for 2017, which is based on The Bank of England's forecast.

You may use the following MLA citation for this page: “Inflation Rate in 1789 | UK Inflation Calculator.” U.S. Official Inflation Data, Alioth Finance, 19 Sep. 2019, https://www.officialdata.org/UK-inflation-rate-in-1789.