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# UK inflation rate in 1921: -8.70%

### Inflation in 1921 and Its Effect on Pound Value

Purchasing power increased by 8.70% in 1921 compared to 1920. On average, you would have to spend 8.70% less money in 1921 than in 1920 for the same item. This is an example of deflation.

In other words, £1 in 1920 is equivalent in purchasing power to about £0.91 in 1921.

The 1920 inflation rate was 15.53%. The inflation rate in 1921 was -8.70%. The 1921 inflation rate is lower compared to the average inflation rate of 4.04% per year between 1921 and 2019.

Inflation rate is calculated by change in the composite price index (CPI). The CPI in 1921 was 23.10. It was 25.30 in the previous year, 1920. The difference in CPI between the years is used by the Office for National Statistics to officially determine inflation. Because the 1921 CPI is less than 1920 CPI, negative inflation (also known as deflation) has occurred.

 Average inflation rate -8.70% Converted amount (£1 base) £0.91 Price difference (£1 base) £-0.09 CPI in 1920 25.300 CPI in 1921 23.100 Inflation in 1920 15.53% Inflation in 1921 -8.70%

### How to Calculate Inflation Rate for £1, 1920 to 1921

This inflation calculator uses the following inflation rate formula:

CPI in 1921CPI in 1920
×
1920 GBP value
=
1921 GBP value

Then plug in historical CPI values. The UK CPI was 25.3 in the year 1920 and 23.1 in 1921:

23.125.3
×
£1
=
£0.91

£1 in 1920 has the same "purchasing power" or "buying power" as £0.91 in 1921.

To get the total inflation rate for the 1 years between 1920 and 1921, we use the following formula:

CPI in 1921 - CPI in 1920CPI in 1920
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

23.1 - 25.325.3
×
100
=
-9%

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

• The League of Nations' first assembly takes place in Paris.
• The British Parliament passes the Fourth Home Rule Act, dividing Ireland into two parts and leading to a yearlong Anglo-Irish war in the southern counties.
• The Catholic Church canonizes Joan of Arc, formally making her a saint.
• The 19th Amendment to the constitution is ratified, granting U.S. woman suffrage for the first time.

### 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 1921 | UK Inflation Calculator.” U.S. Official Inflation Data, Alioth Finance, 18 Oct. 2019, https://www.officialdata.org/UK-inflation-rate-in-1921.