An interactive explanation

The number notebook.

Change a rate. Watch the price level. A small, fictional example makes the difference visible.

01 / Rates and levels

What happens after inflation slows?

Start with an illustrative price index of 100. A 10% rise takes it to 110 after the first year. Choose the second year’s rate below.

Second-year price change (%)

Choose −5% to +10%, in steps of 0.5 percentage points. This is a teaching range, not a forecast.

Fictional index / starting level = 100

Start

100.00

Year 1

110.00

Year 2

115.50

Prices are still rising. The second-year rate is lower, while the price level is higher.

Change from the starting level+15.5%

Second-year level = 110 × (1 + rate ÷ 100). Values are rounded for display. This index is illustrative, not an observed inflation series or a household budget.

Read the number in context.

The example changes only one rate. Real inflation measures track a weighted basket, and an individual household’s spending can differ. Follow the full explanation and its official sources.

Related explanation is being prepared.