£

UK inflation rate in 2016: 1.74%

Inflation in 2016 and Its Effect on Pound Value

Purchasing power decreased by 1.74% in 2016 compared to 2015. On average, you would have to spend 1.74% more money in 2016 than in 2015 for the same item.

In other words, £1 in 2015 is equivalent in purchasing power to about £1.02 in 2016.

The 2015 inflation rate was 0.99%. The inflation rate in 2016 was 1.74%. The 2016 inflation rate is lower compared to the average inflation rate of 2.62% per year between 2016 and 2019.

Inflation rate is calculated by change in the composite price index (CPI). The CPI in 2016 was 1,037.70. It was 1,020.00 in the previous year, 2015. The difference in CPI between the years is used by the Office for National Statistics to officially determine inflation.

 Average inflation rate 1.74% Converted amount (£1 base) £1.02 Price difference (£1 base) £0.02 CPI in 2015 1,020.000 CPI in 2016 1,037.700 Inflation in 2015 0.99% Inflation in 2016 1.74%

How to Calculate Inflation Rate for £1, 2015 to 2016

This inflation calculator uses the following inflation rate formula:

CPI in 2016CPI in 2015
×
2015 GBP value
=
2016 GBP value

Then plug in historical CPI values. The UK CPI was 1020 in the year 2015 and 1037.7 in 2016:

1037.71020
×
£1
=
£1.02

£1 in 2015 has the same "purchasing power" or "buying power" as £1.02 in 2016.

To get the total inflation rate for the 1 years between 2015 and 2016, we use the following formula:

CPI in 2016 - CPI in 2015CPI in 2015
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

1037.7 - 10201020
×
100
=
2%

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

• Barack Obama and Raul Castro, hold the first meeting between Cuban and American leaders since the Cuban Revolution.
• The population of India reaches 1 billion (officially). The billionth baby was named Astha Arora.
• Donald Trump announces his intention to join the US presidential campaign.
• China brings an end to its one child policy, 35 years after it was first introduced.

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 2016 | UK Inflation Calculator.” U.S. Official Inflation Data, Alioth Finance, 23 Oct. 2019, https://www.officialdata.org/UK-inflation-rate-in-2016.