Inflation in 2025 and its effect on pound value
£1 in 2024 is equivalent in purchasing power to about £1.03 today. The pound had an average inflation rate of 2.60% in the last 12 months. As a result, the real value of a pound has been decreasing recently. Purchasing power decreased by 2.60% in 2025 compared to 2024. On average, you would have to spend 2.60% more money in 2025 than in 2024 for the same item.
This means that today's prices are 1.03 times as high as average prices since 2024, according to the Office for National Statistics composite price index. A pound today only buys 97.087% of what it could buy back then.
The inflation rate in 2024 was 3.26%. The current inflation rate compared to the end of last year is now 2.60%. If this number holds, £1 today will be equivalent in buying power to £1.03 next year.
Inflation rate is calculated by change in the composite price index (CPI). The CPI in 2025 is 1,445.08. It was 1,408.46 in the previous year, 2024. The difference in CPI between the years is used by the Office for National Statistics to officially determine inflation.
⌃
| Average inflation rate | 2.60% |
| Converted amount £1 base | £1.03 |
| Price difference £1 base | £0.03 |
| CPI in 2024 | 1,408.457 |
| CPI in 2025 | 1,445.077 |
| Inflation in 2024 | 3.26% |
| Inflation in 2025 | 2.60% |
| £1 in 2024 | £1.03 in 2025 |
How to calculate inflation rate for £1 since 2024
Our calculations use the following inflation rate formula to calculate the change in value between 2024 and today:
CPI today CPI in 2024
×
2024 GBP value
=
Today's value
Then plug in historical CPI values. The U.K. CPI was 1408.4566867212768 in the year 2024 and 1445.07656057603 in 2025:
1445.076560576031408.4566867212768
×
£1
=
£1.03
£1 in 2024 has the same "purchasing power" or "buying power" as £1.03 in 2025.
To get the total inflation rate for the 1 years between 2024 and 2025, we use the following formula:
CPI in 2025 - CPI in 2024CPI in 2024
×
100
=
Cumulative inflation rate (1 years)
Plugging in the values to this equation, we get:
1445.07656057603 - 1408.45668672127681408.4566867212768
×
100
=
3%
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.
You may use the following MLA citation for this page: “Inflation Rate in 2025 | UK Inflation Calculator.” Official Inflation Data, Alioth Finance, 24 Dec. 2024, https://www.officialdata.org/UK-inflation-rate-in-2025.
Special thanks to QuickChart for their chart image API, which is used for chart downloads.
| Average inflation rate | 2.60% |
| Converted amount £1 base | £1.03 |
| Price difference £1 base | £0.03 |
| CPI in 2024 | 1,408.457 |
| CPI in 2025 | 1,445.077 |
| Inflation in 2024 | 3.26% |
| Inflation in 2025 | 2.60% |
| £1 in 2024 | £1.03 in 2025 |