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# UK inflation rate in 1987: 4.17%

### Inflation in 1987 and Its Effect on Pound Value

Purchasing power decreased by 4.17% in 1987 compared to 1986. On average, you would have to spend 4.17% more money in 1987 than in 1986 for the same item.

In other words, £1 in 1986 is equivalent in purchasing power to about £1.04 in 1987.

The 1986 inflation rate was 3.40%. The inflation rate in 1987 was 4.17%. The 1987 inflation rate is higher compared to the average inflation rate of 3.26% per year between 1987 and 2019.

Inflation rate is calculated by change in the composite price index (CPI). The CPI in 1987 was 402.00. It was 385.90 in the previous year, 1986. The difference in CPI between the years is used by the Office for National Statistics to officially determine inflation.

 Average inflation rate 4.17% Converted amount (£1 base) £1.04 Price difference (£1 base) £0.04 CPI in 1986 385.900 CPI in 1987 402.000 Inflation in 1986 3.40% Inflation in 1987 4.17%

### How to Calculate Inflation Rate for £1, 1986 to 1987

This inflation calculator uses the following inflation rate formula:

CPI in 1987CPI in 1986
×
1986 GBP value
=
1987 GBP value

Then plug in historical CPI values. The UK CPI was 385.9 in the year 1986 and 402 in 1987:

402385.9
×
£1
=
£1.04

£1 in 1986 has the same "purchasing power" or "buying power" as £1.04 in 1987.

To get the total inflation rate for the 1 years between 1986 and 1987, we use the following formula:

CPI in 1987 - CPI in 1986CPI in 1986
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

402 - 385.9385.9
×
100
=
4%

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

• Ferdinand Marcos becomes president of the Philippines after rigged elections.
• 6.5 million People hold hands across the US in an event referred to as Hands Across America.
• Doctors announce that the drug AZT will be available to AIDS patients.
• Talks between Ronald Reagan and Mikhail Gorbachev begin at the Reykjavik summit.
• Mrs. Davina Thompson receives the first heart, lung and liver transplant in Cambridge, England.

### 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 1987 | UK Inflation Calculator.” U.S. Official Inflation Data, Alioth Finance, 20 Jul. 2019, https://www.officialdata.org/UK-inflation-rate-in-1987.