Historic Value of Money

puffinld

Is there any way that I can find out the historic value of money? If I had £1000 in 1989, what would be it's value in 1991 and in 1993? In other words, are there any tables sitting somewhere on a website that would enable me to make such calculations?

Ilya_Ilyich

http://www.wolfbane.com/rpi.htm

[Nominal amount] * [RPI in year 1] / [RPI in year 2]

So e.g. £1000 in Jan 89 = 1000 * 111/130.2 = £852.53 in jan 91

puffinld

So - if I bought something for £1000 in 1989, I could buy the same thing in 1991 for less (ie £852,53) - doesn't sound right??

Now I'm thoroughly confused.

Saints2011

You would only have spending power of £852 rather than the £1000 you would of had in 1989

(Figures not worked out just taken from above)

shirehorse78

Your instinct is correct - what's happening is the value of money relative to "stuff" is actually less in '91 - i.e. you can buy less with the same amount - which is another way of saying what £1000 bought in jan 89 gets you only £852.53 of equivalent stuff in jan 91.

Purchasing power of £x does tend to decrease, i.e. an absolute amount of £1000 buys less "stuff" in successive years (although it's not impossible for deflation to cause the opposite effect but it's been relatively rare in my lifetime).

moneylover

http://www.measuringworth.com/ppoweruk/ Measuring Worth website
sits in a suite of historical money website links many of which can be useful
http://projects.exeter.ac.uk/RDavies/arian/current/howmuch.html

puffinld

That's wonderful. Just what I needed so I probably asked the wrong question up front!

Thanks a bunch.