Inflation calculation

Question

Am I correct in saying that £100 in the year 2000 was worth roughly £60 in 2018 (or had the same buying power to put it another way)?

I've used the calculator here, but they way they put it is slightly different to the way I'd like to word it and I just wanted to make sure I wasn't misinterpreting the information.

score 2 · Answer 1 · answered Apr 28 '19 at 12:31

2

No, the other way around. What you could buy for £60 in 2000 you would now need £100 to buy.

answered Apr 28 '19 at 12:31

kccu

179
6

I think we're saying the same thing? If bought £60 of stuff in 2000, that same stuff would cost me £100 now. Same as saying buying £100 of stuff in 1000 will have depreciated in value to about £60 now. It's a bit of a word game too, but I think we're saying the same thing? – user85769 Apr 28 '19 at 13:18
I see what you are saying now, but I think your original phrasing is poor. £100 in 2000 had more buying power than £60 did in 2018. What you could say is if you had £100 in 2000, and held onto it until 2018, you would only be able to buy £60 (but this is year-2000 pounds) worth of stuff. £100 in 2018 will always buy you £100 (in year-2018 pounds) worth of stuff. – kccu Apr 28 '19 at 14:07
Your perspective perhaps makes the most sense looking forward. If I have £100 now, and I hold onto it for X years, how much will it be worth in today's pounds? – kccu Apr 28 '19 at 14:09
Yeah, I don't think it's as clear as I'd have liked. Thanks for the suggestion :) – user85769 Apr 28 '19 at 14:09

score 0 · Accepted Answer · answered Apr 28 '19 at 13:39

The typical way to talk about inflation is to show numbers rising, e.g. What cost me $100 in 1976 would have cost $446 in 2018.

The way you are phrasing the question is fine, however. The hundred dollar I had in 1976, just left on my night table, would buy $21.59 worth of goods.

Both direction work depending on your goal. Strangely enough, electronics' cost has gone in the other direction, over time most consumer electronics become more powerful at a rate far faster than any price increase due to inflation. But, I digress.

Inflation calculation

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