How to calculate inflation
Inflation can seem complex but it is a very simple benchmark that allows us to compare the relative costs of a service or goods over time.
Calculating inflation requires two simple figures:
- a: The current cost of a product/service
- b: The previous cost of a product/service
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Inflation Rate Formula
Using the two figures above for the product/service defined, inflation is calculated using the formula below.
Inflation Rate (%) = ( (b - a) / a) x 100
Inflation Rate calculations for specific countries encompass many products and services but the inflation rate formula remains the same.
You may like to try our Inflation Calculator to see how the value of money has changed over time.
Next: Causes of inflation
Previous: Deflation Explained
Comprehensive Inflation Guides and Calculators
Explore our detailed guides and calculators to understand inflation, salary adjustments, and historical trends. Whether you need to calculate inflation impact or learn about core inflation, our resources provide valuable insights.
- What is Inflation? Understanding the Basics
- Inflation Calculator UK - Adjust Prices for Inflation
- UK Salary Inflation Calculator - Compare Past and Present Earnings
- Core Inflation Explained - Understanding Price Stability
- Types of Inflation - Demand-Pull, Cost-Push & More
- Deflation Explained - How It Affects the Economy
- How to Calculate Inflation - A Step-by-Step Guide
- What Causes Inflation? Economic Factors Explained
- Consumer Price Index (CPI) Explained
- Historic Inflation Rates - Trends and Analysis