Buying power of £100 in 1940

This chart shows a calculation of buying power equivalence for £100 in 1940 (price index tracking began in 1750).

For example, if you started with £100, you would need to end with £5,000 in order to "adjust" for inflation (sometimes refered to as "beating inflation").

When £100 is equivalent to £5,000 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 1940 dollars, the chart below shows how £100 is worth less over 74 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:

This conversion table shows various other 1940 amounts in 2014 pounds, based on the 4,900.00% change in prices:

How to calculate inflation rate for £100, 1940 to 2014

Our calculations use the following inflation rate formula to calculate the change in value between 1940 and 2014:

Then plug in historical CPI values. The U.K. CPI was 20.2 in the year 1940 and 1010 in 2014:

£100 in 1940 has the same "purchasing power" or "buying power" as £5,000 in 2014.

To get the total inflation rate for the 74 years between 1940 and 2014, we use the following formula:

Plugging in the values to this equation, we get:

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 the current year, which is based on The Bank of England's forecast.

» Read more about inflation and investment.