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Last updated on July 30th 2026
Base currency
US dollar
Index date
Jul 2026
Adjust to account for gdp per person
Raw indexGDP-adjusted
The British pound
is
19% overvalued
against the US dollar
Jul 2026 A Big Mac costs £5.49
in Britain
and US$6.22
in the United States.
The implied exchange rate is 0.88.
The difference between this and the actual exchange rate, 0.74,
suggests the British pound is
19% overvalued.
2000-2026
Note: All prices include tax
- McDonald’s
- LSEG Workspace
- IMF
- Eurostat
- LebaneseLira.org
- Banque du Liban
- The Economist
The Big Mac index was invented by The Economist in 1986 as a lighthearted guide to whether currencies are at their “correct” level. It is based on the theory of purchasing-power parity (PPP), the notion that in the long run exchange rates should move towards the rate that would equalise the prices of an identical basket of goods and services (in this case, a burger) in any two countries.
Burgernomics was never intended as a precise gauge of currency misalignment, merely a tool to make exchange-rate theory more digestible. Yet the Big Mac index has become a global standard, included in several economic textbooks and the subject of dozens of academic studies. For those who take their fast food more seriously, we also calculate a gourmet version of the index.
Purchasing-power parity implies that exchange rates are determined by the value of goods that currencies can buy
Differences in local prices – in our case, for Big Macs – can suggest what the exchange rate should be
Using burgernomics, we can estimate how much one currency is under- or over-valued relative to another
The GDP-adjusted index addresses the criticism that you would expect average burger prices to be cheaper in poor countries than in rich ones because labour costs are lower. PPP signals where exchange rates should be heading in the long run, as a country like China gets richer, but it says little about today’s equilibrium rate. The relationship between prices and GDP per person may be a better guide to the current fair value of a currency.
In July 2022 we updated the Big Mac index to use a McDonalds-provided price for the United States. We also changed our methodology for how we calculate the GDP-adjusted index, the full history of which will now be adjusted whenever the IMF’s historical GDP series are updated. The previously published versions of both indices are available in our archive.
Read more about the Big Mac index in “Our Big Mac index carries an Asian warning”. You can also download the data or read the methodology behind the Big Mac index here. ■
