U.K. inflation rate in 2021: 0.70%

£

Inflation in 2021 and its effect on pound value

£1 in 2020 is equivalent in purchasing power to about £1.01 today. The pound had an average inflation rate of 0.70% in the last 12 months. As a result, the real value of a pound has been decreasing recently. Purchasing power decreased by 0.70% in 2021 compared to 2020. On average, you would have to spend 0.70% more money in 2021 than in 2020 for the same item.

This means that today's prices are 1.01 times higher than average prices since 2020, according to the Office for National Statistics composite price index. A pound today only buys 99.01% of what it could buy back then.

The 2020 inflation rate was 1.80%. The current year-over-year inflation rate (2020 to 2021) is now 0.70%1. If this number holds, £1 today will be equivalent in buying power to £1.01 next year.

Inflation rate is calculated by change in the composite price index (CPI). The CPI in 2021 is 1,159.95. It was 1,151.89 in the previous year, 2020. The difference in CPI between the years is used by the Office for National Statistics to officially determine inflation.

 Average inflation rate 0.70% Converted amount (£1 base) £1.01 Price difference (£1 base) £0.01 CPI in 2020 1,151.888 CPI in 2021 1,159.951 Inflation in 2020 1.80% Inflation in 2021 0.70% £1 in 2020 £1.01 in 2021

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

How to Calculate Inflation Rate for £1 since 2020

Our calculations use the following inflation rate formula to calculate the change in value between 2020 and today:

CPI today CPI in 2020
×
2020 GBP value
=
Today's value

Then plug in historical CPI values. The U.K. CPI was 1151.88772393 in the year 2020 and 1159.950938 in 2021:

1159.9509381151.88772393
×
£1
=
£1.01

£1 in 2020 has the same "purchasing power" or "buying power" as £1.01 in 2021.

To get the total inflation rate for the 1 years between 2020 and 2021, we use the following formula:

CPI in 2021 - CPI in 2020CPI in 2020
×
100
=
Cumulative inflation rate (1 years)

Plugging in the values to this equation, we get:

1159.950938 - 1151.887723931151.88772393
×
100
=
1%

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 2021 | UK Inflation Calculator.” Official Inflation Data, Alioth Finance, 27 Jul. 2021, https://www.officialdata.org/UK-inflation-rate-in-2021.

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in2013dollars.com is a reference website maintained by the Official Data Foundation.