£1 in 2005 is worth £0.92 in 2002

Value of £1 from 2005 to 2002

According to the Office for National Statistics composite price index, prices in 2002 are 8.21% lower than average prices since 2005. The British pound experienced an average inflation rate of 2.90% per year during this period, causing the real value of a pound to decrease.

In other words, £1 in 2005 is equivalent in purchasing power to about £0.92 in 2002, a difference of £-0.08 over 3 years.

The 2002 inflation rate was 1.67%. The inflation rate in 2005 was 2.82%. The 2005 inflation rate is higher compared to the average inflation rate of 2.75% per year between 2005 and 2020.


Inflation from 2005 to 2002
Cumulative price change -8.21%
Average inflation rate 2.90%
Converted amount (£1 base) £0.92
Price difference (£1 base) £-0.08
CPI in 2005 757.300
CPI in 2002 695.100
Inflation in 2002 1.67%
Inflation in 2005 2.82%

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

Buying power of £1 in 2002

This chart shows a calculation of buying power equivalence for £1 in 2002 (price index tracking began in 1750).

For example, if you started with £1, you would need to end with £0.92 in order to "adjust" for inflation (sometimes refered to as "beating inflation").

When £1 is equivalent to £0.92 over time, that means that the "real value" of a single U.K. pound decreases over time. In other words, a pound will pay for fewer items at the store.

This effect explains how inflation erodes the value of a pound over time. By calculating the value in 2002 dollars, the chart below shows how £1 is worth less over 3 years.

According to the Office for National Statistics, each of these GBP amounts below is equal in terms of what it could buy at the time:

Pound inflation: 2002-2005
Year Pound Value Inflation Rate
2002 £1.00 1.67%
2003 £1.03 2.89%
2004 £1.06 2.98%
2005 £1.09 2.82%
2006 £1.12 3.20%
2007 £1.17 4.29%
2008 £1.22 3.99%
2009 £1.21 -0.53%
2010 £1.27 4.61%
2011 £1.33 5.20%
2012 £1.38 3.21%
2013 £1.42 3.04%
2014 £1.45 2.36%
2015 £1.47 0.99%
2016 £1.49 1.74%
2017 £1.55 3.58%
2018 £1.58 2.48%
2019 £1.61 1.80%
2020 £1.64 1.50%*
* Compared to previous annual rate. Not final. See inflation summary for latest 12-month trailing value.

This conversion table shows various other 2002 amounts in 2005 pounds, based on the -8.21% change in prices:

Conversion Table: Value of a pound in 2005
Initial value Equivalent value
£1 pound in 2002 £1.09 pounds in 2005
£5 pounds in 2002 £5.45 pounds in 2005
£10 pounds in 2002 £10.89 pounds in 2005
£50 pounds in 2002 £54.47 pounds in 2005
£100 pounds in 2002 £108.95 pounds in 2005
£500 pounds in 2002 £544.74 pounds in 2005
£1,000 pounds in 2002 £1,089.48 pounds in 2005
£5,000 pounds in 2002 £5,447.42 pounds in 2005
£10,000 pounds in 2002 £10,894.84 pounds in 2005
£50,000 pounds in 2002 £54,474.18 pounds in 2005
£100,000 pounds in 2002 £108,948.35 pounds in 2005
£500,000 pounds in 2002 £544,741.76 pounds in 2005
£1,000,000 pounds in 2002 £1,089,483.53 pounds in 2005

How to Calculate Inflation Rate for £1, 2002 to 2005

Our calculations use the following inflation rate formula to calculate the change in value between 2002 and 2005:

CPI in 2002 CPI in 2005
×
2005 GBP value
=
2002 GBP value

Then plug in historical CPI values. The U.K. CPI was 757.3 in the year 2005 and 695.1 in 2002:

695.1757.3
×
£1
=
£0.92

£1 in 2005 has the same "purchasing power" or "buying power" as £0.92 in 2002.

To get the total inflation rate for the 3 years between 2002 and 2005, we use the following formula:

CPI in 2002 - CPI in 2005CPI in 2005
×
100
=
Cumulative inflation rate (3 years)

Plugging in the values to this equation, we get:

695.1 - 757.3757.3
×
100
=
-8%

News headlines from 2002

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

  • Egyptian President Hosni Mubarak asks Parliament to amend Article 76 and orders constitutional changes in order to allow multi-candidate presidential elections.
  • Syria's 29-year-long military domination of Lebanon ends, after it withdraws the last of its 14,000 troops under international pressure.
  • A coordinated bomb attack hits London's public transport system, during the morning rush hour, killing 52 and injuring a further 700 people.
  • Angela Merkel becomes first female Chancellor of Germany.

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: “£1 in 2005 → 2002 | UK Inflation Calculator.” Official Inflation Data, Alioth Finance, 7 Aug. 2020, https://www.officialdata.org/uk/inflation/2005?amount=1&endYear=2002.

Special thanks to QuickChart for their chart image API, which is used for chart downloads.

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


Ian Webster

About the author

Ian Webster is an engineer and data expert based in San Mateo, California. He has worked for Google, NASA, and consulted for governments around the world on data pipelines and data analysis. Disappointed by the lack of clear resources on the impacts of inflation on economic indicators, Ian believes this website serves as a valuable public tool. Ian earned his degree in Computer Science from Dartmouth College.

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Inflation from 2005 to 2002
Cumulative price change -8.21%
Average inflation rate 2.90%
Converted amount (£1 base) £0.92
Price difference (£1 base) £-0.08
CPI in 2005 757.300
CPI in 2002 695.100
Inflation in 2002 1.67%
Inflation in 2005 2.82%