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# U.K. inflation rate in 1920: 15.53%

### Inflation in 1920 and Its Effect on Pound Value

Purchasing power decreased by 15.53% in 1920 compared to 1919. On average, you would have to spend 15.53% more money in 1920 than in 1919 for the same item.

In other words, £1 in 1919 is equivalent in purchasing power to about £1.16 in 1920.

The 1919 inflation rate was 10.05%. The inflation rate in 1920 was 15.53%. The 1920 inflation rate is higher compared to the average inflation rate of 3.88% per year between 1920 and 2020.

Inflation rate is calculated by change in the composite price index (CPI). The CPI in 1920 was 25.30. It was 21.90 in the previous year, 1919. The difference in CPI between the years is used by the Office for National Statistics to officially determine inflation.

 Average inflation rate 15.53% Converted amount (£1 base) £1.16 Price difference (£1 base) £0.16 CPI in 1919 21.900 CPI in 1920 25.300 Inflation in 1919 10.05% Inflation in 1920 15.53%

GBP Inflation since 1750
Annual Rate, the Office for National Statistics CPI

### How to Calculate Inflation Rate for £1, 1919 to 1920

This inflation calculator uses the following inflation rate formula:

CPI in 1920CPI in 1919
×
1919 GBP value
=
1920 GBP value

Then plug in historical CPI values. The U.K. CPI was 21.9 in the year 1919 and 25.3 in 1920:

25.321.9
×
£1
=
£1.16

£1 in 1919 has the same "purchasing power" or "buying power" as £1.16 in 1920.

To get the total inflation rate for the 1 years between 1919 and 1920, we use the following formula:

CPI in 1920 - CPI in 1919CPI in 1919
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

25.3 - 21.921.9
×
100
=
16%

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

• The German Farmer's Party, which would later develop into National Socialist Party, is formed.
• The Bolshevik party re-establishes the idea of a five-member Politburo at the 8th Congress of the Russian Communist Party, making it the central body of political power in the Soviet Union. Its first members were Vladimir Lenin, Leon Trotsky, Joseph Stalin, Lev Kamenev and Nikolai Krestinsky.
• The Turkish War of Independence begins after Mustafa Kemal Ataturk's lands at Samsun, on the Black Sea.
• The Treaty of Versailles is signed ending World War I and establishing the League of Nations.

### 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 1920 | UK Inflation Calculator.” Official Inflation Data, Alioth Finance, 25 Jan. 2020, https://www.officialdata.org/UK-inflation-rate-in-1920.