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# U.K. inflation rate in 1932: -2.41%

### Inflation in 1932 and Its Effect on Pound Value

Purchasing power increased by 2.41% in 1932 compared to 1931. On average, you would have to spend 2.41% less money in 1932 than in 1931 for the same item. This is an example of deflation.

In other words, £1 in 1931 is equivalent in purchasing power to about £0.98 in 1932.

The 1931 inflation rate was -4.05%. The inflation rate in 1932 was -2.41%. The 1932 inflation rate is lower compared to the average inflation rate of 4.95% per year between 1932 and 2020.

Inflation rate is calculated by change in the composite price index (CPI). The CPI in 1932 was 16.20. It was 16.60 in the previous year, 1931. The difference in CPI between the years is used by the Office for National Statistics to officially determine inflation. Because the 1932 CPI is less than 1931 CPI, negative inflation (also known as deflation) has occurred.

 Average inflation rate -2.41% Converted amount (£1 base) £0.98 Price difference (£1 base) £-0.02 CPI in 1931 16.600 CPI in 1932 16.200 Inflation in 1931 -4.05% Inflation in 1932 -2.41%

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

### How to Calculate Inflation Rate for £1, 1931 to 1932

This inflation calculator uses the following inflation rate formula:

CPI in 1932CPI in 1931
×
1931 GBP value
=
1932 GBP value

Then plug in historical CPI values. The U.K. CPI was 16.6 in the year 1931 and 16.2 in 1932:

16.216.6
×
£1
=
£0.98

£1 in 1931 has the same "purchasing power" or "buying power" as £0.98 in 1932.

To get the total inflation rate for the 1 years between 1931 and 1932, we use the following formula:

CPI in 1932 - CPI in 1931CPI in 1931
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

16.2 - 16.616.6
×
100
=
-2%

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

• The Empire State Building opens in New York.
• A railway explosion is faked by the Japanese in order to create a pretext for their Manchuria invasion.
• Proclamation of the Chinese People's Republic by Mao Zedong.

### 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 1932 | UK Inflation Calculator.” Official Inflation Data, Alioth Finance, 25 Jan. 2020, https://www.officialdata.org/UK-inflation-rate-in-1932.