STAT/08/8 16 January 2008
December 2007 Euro area annual inflation stable at 3.1% EU up to 3.2%
Euro area1 annual inflation was 3.1% in December 20072, unchanged compared with November. A year earlier the rate was 1.9%. Monthly inflation was 0.4% in December 2007.
EU3 annual inflation was 3.2% in December 2007, up from 3.1% in November. A year earlier the rate was 2.2%. Monthly inflation was 0.4% in December 2007.
These figures come from Eurostat, the Statistical Office of the European Communities.
Inflation in the EU Member States
In December 2007, the lowest annual rates were observed in the Netherlands (1.6%), Finland (1.9%) and the United Kingdom (2.1%), and the highest in Latvia (14.0%), Bulgaria (11.6%) and Estonia (9.7%). Compared with November 2007, annual inflation rose in seventeen Member States, remained stable in three and fell in six.
The lowest 12-month averages4 up to December 2007 were registered in Malta (0.7%) and France, the Netherlands and Finland (1.6% each), and the highest in Latvia (10.1%), Hungary (7.9%) and Bulgaria (7.6%).
Euro area
The main components with the highest annual rates in December 2007 were education (9.4%), transport (5.6%) and food (4.8%), while the lowest annual rates were observed for communications (-2.3%), recreation & culture (0.1%) and clothing (1.0%). Concerning the detailed sub-indices, fuels for transport (+0.49 percentage points), milk, cheese & eggs (+0.18) and heating oil (+0.17) had the largest upward impacts on the headline rate, while telecommunications (-0.16), garments (-0.12) and IT equipment (-0.08) had the biggest downward impacts.
The main components with the highest monthly rates were recreation & culture (2.3%), hotels & restaurants (1.1%) and food (0.7%), and the lowest were clothing (-0.8%), communications (-0.4%) and alcohol & tobacco and education (0.0% each). In particular, package holidays (+0.21 percentage points), accommodation services (+0.07) and air transport (+0.03) had the largest upward impacts, while garments and fuels for transport (-0.07 each) and rents and telecommunications (-0.02 each) had the biggest downward impacts.
Annual inflation (%) in December 2007 in ascending order
Euro area
NL FI PT FR IT BE DE MT1 Euro area IE5 AT CY1 EL ES LU SI 1.6p 1.9 2.7 2.8 2.8 3.1 3.1 3.1 3.1p Nov 07 3.5 3.5p 3.7 3.9 4.3 4.3 5.7 EU Member States outside the euro area
UK DK SK SE EU PL CZ RO HU LT EE BG LV 2.1 2.4 2.5 2.5 3.2p 4.2 5.5 6.7 7.4 8.2 9.7 11.6 14.0 Inflation rates in %, measured by HICPs
Annual rates 12 month average rates4 Monthly rates Dec 07 Dec 06 Nov 07 Nov 06 Oct 07 Oct 06 Sep 07 Sep 06 Dec 06 Dec 05 Dec 07-06 Dec 06-05 Dec 07 Nov 07 Belgium (BE) 3.1 2.9 2.2 1.4 2.1 1.8 0.4 Germany (DE) 3.1 3.3 2.7 2.7 1.4 2.3 0.7 Ireland (IE)5 : 3.5 3.0 2.9 3.0 : : Greece (EL) 3.9 3.9 3.0 2.9 3.2 3.0 0.5 Spain (ES) 4.3 4.1 3.6 2.7 2.7 2.8 0.4 France (FR) 2.8 2.6 2.1 1.6 1.7 1.6 0.4 Italy (IT)6 2.8 2.6 2.3 1.7 2.1 2.0 0.3 Cyprus (CY)1 3.7 3.2 2.7 2.3 1.5 2.2 0.3 Luxembourg (LU) 4.3 4.0 3.6 2.5 2.3 2.7 0.4 Malta (MT)1 3.1 2.9 1.6 0.9 0.8 0.7 0.1 Netherlands (NL) 1.6p 1.8 1.6 1.3 1.7 1.6p -0.5p Austria (AT) 3.5p 3.2 2.9 2.1 1.6 2.2p 0.6p Portugal (PT) 2.7 2.8 2.5 2.0 2.5 2.4 0.1 Slovenia (SI) 5.7 5.7 5.1 3.6 3.0 3.8 0.4 Finland (FI) 1.9 2.2r 1.8 1.7 1.2 1.6 -0.2 Euro area (MUICP) 3.1p 3.1 2.6 2.1 1.9 2.1p 0.4p Bulgaria (BG) 11.6 11.4 10.6 11.0 6.1 7.6 1.1 Czech Republic (CZ) 5.5 5.1 4.0 2.8 1.5 3.0 0.6 Denmark (DK) 2.4 2.5 1.8 1.2 1.7 1.7 -0.1 Estonia (EE) 9.7 9.3 8.7 7.5 5.1 6.7 0.7 Latvia (LV) 14.0 13.7 13.2 11.5 6.8 10.1 0.6 Lithuania (LT) 8.2 7.9 7.6 7.1 4.5 5.8 0.5 Hungary (HU) 7.4 7.2 6.9 6.4 6.6 7.9 0.3 Poland (PL) 4.2 3.7 3.1 2.7 1.4 2.6 0.3 Romania (RO) 6.7 6.8 6.9 6.1 4.9 4.9 0.6 Slovakia (SK) 2.5 2.3 2.4 1.7 3.7 1.9 0.3 Sweden (SE) 2.5 2.4 1.9 1.6 1.4 1.7 0.1 United Kingdom (UK) 2.1 2.1 2.1 1.8 3.0 2.3 0.6 EU (EICP) 3.2p 3.1 2.7 2.2 2.2 2.3p 0.4p Iceland 3.5 2.8 2.3 2.1 5.9 3.6 0.7 Norway 1.9 1.0 -0.3 -0.3 2.2 0.7 0.4 EEA (EEAICP) 3.2p 3.1 2.6 2.2 2.2 2.3p 0.4p Source: Eurostat p = provisional: = data not available r = revised
Euro area inflation rates in % for main components, measured by HICPs
Weight used in 2007 Annual rates 12 month average rates4 Monthly rates Euro area (MUICP) Dec 07 Dec 06 Nov 07 Nov 06 Oct 07 Oct 06 Sep 07 Sep 06 Dec 06 Dec 05 Dec 07-06 Dec 06-05 Dec 07 Nov 07 00 All-items 1000.0 3.1p 3.1 2.6 2.1 1.9 2.1p 0.4p 01 Food 155.7 4.8p 4.3 3.8 2.4 2.6 2.7p 0.7p 02 Alcohol and tobacco 39.9 2.5p 2.6 2.5 3.8 3.2 3.4p 0.0p 03 Clothing 69.3 1.0p 1.2 1.1 0.9 0.9 1.0p -0.8p 04 Housing 154.7 3.6p 3.6 2.7 2.4 3.6 2.7p 0.1p 05 Household equipment 72.7 1.9p 2.0 1.9 1.9 1.2 1.7p 0.1p 06 Health 40.6 1.3p 1.4 1.4 1.4 1.7 1.7p 0.1p 07 Transport 158.0 5.6p 5.8 4.1 2.8 1.2 2.4p 0.1p 08 Communications 30.8 -2.3p -1.8 -2.1 -1.6 -2.3 -1.9p -0.4p 09 Recreation and culture 94.4 0.1p 0.3 0.0 0.2 0.0 0.2p 2.3p 10 Education 9.6 9.4p 9.4 9.5 9.1 3.5 7.8p 0.0p 11 Hotels and restaurants 91.8 3.4p 3.2 3.2 3.1 2.7 3.2p 1.1p 12 Miscellaneous 82.6 2.3p 2.3 2.2 2.2 2.3 2.3p 0.1p All-items -excl. energy 903.8 2.4p 2.3 2.2 2.0 1.8 2.1p 0.5p -excl. energy, FoodAlcTob* 708.3 1.9p 1.9 1.9 1.8 1.5 1.9p 0.5p -excl. energy, unproc. food 827.6 2.3p 2.3 2.1 2.0 1.6 2.0p 0.5p -excl. energy, seas. food 865.1 2.4p 2.3 2.2 2.0 1.7 2.0p 0.5p -excl. tobacco 975.2 3.1p 3.1 2.5 2.1 1.8 2.1p 0.4p Energy 96.2 9.2p 9.7 5.5 3.0 2.9 2.6p -0.3p FoodAlcTob* 195.6 4.3p 4.0 3.5 2.7 2.7 2.8p 0.5p Source: Eurostat * FoodAlcTob = Food, alcohol and tobaccop = provisional
Euro area sub-indices with most important impacts
Weight (‰) 2007 Rate (%) Impact (percentage points) COICOP December 07 / December 06 07.22 Fuels for transport 43.7 13.7p 0.49 01.14 Milk, cheese and eggs 21.5 11.1p 0.18 04.53 Heating oil 8.3 23.4p 0.17 01.11 Bread and cereals 25.4 7.1p 0.10 10.x0 Education 9.6 9.4p 0.06 11.11 Restaurants and cafés 67.8 3.7p 0.05 09.11 Audio-visual equipment 5.2 -10.1p -0.07 07.11 Cars 43.7 1.5p -0.07 04.11/2 Rents 62.1 2.0p -0.07 09.13 IT equipment 4.4 -14.2p -0.08 03.12 Garments 51.0 0.9p -0.12 08.2/3 Telecommunications 28.9 -2.4p -0.16 December 07 / November 07 09.60 Package holidays 14.2 17.8p 0.21 11.20 Accommodation services 16.1 4.8p 0.07 07.33 Air transport 5.3 5.6p 0.03 01.14 Milk, cheese and eggs 21.5 1.4p 0.02 01.11 Bread and cereals 25.4 0.8p 0.01 01.13 Fish 11.7 1.2p 0.01 03.21/2 Footwear 14.0 -0.5p -0.01 09.41 Recreational and sporting services 10.3 -0.9p -0.01 08.2/3 Telecommunications 28.9 -0.3p -0.02 04.11/2 Rents 62.1 0.1p -0.02 07.22 Fuels for transport 43.7 -0.9p -0.07 03.12 Garments 51.0 -0.9p -0.07 Source: Eurostatp= provisional
Measures of inflation
The annual rate measures the price change between the current month and the same month of the previous year. This measure is responsive to recent changes in price levels but can be influenced by one-off effects in either month.
The 12-month average rate4 overcomes this volatility by comparing average Harmonized Indices of Consumer Prices (HICPs) in the latest 12 months to the average of the previous 12 months. This measure is less sensitive to transient changes in prices.
The monthly rate compares price levels between the two latest months. Although up-to-date, it can be affected by seasonal and other effects.
The impact of a particular component measures the change in the headline inflation due to the inclusion of that component in the HICP. The impact takes account of both the weight and whether the inflation for that component is higher or lower than the all-items inflation rate. For example, the impact of ‘tobacco’ is equal to the difference between the all-items inflation rate and the rate for ‘all-items excluding tobacco’. Impacts are not strictly additive.
HICPs designed for international comparison
Harmonized Indices of Consumer Prices (HICPs) are harmonized inflation figures required under Article 121 of the Treaty of Amsterdam (109j of the Treaty on European Union). They are designed for international comparison of consumer price inflation. The focus is on quality and comparability among the indices of different countries as well as on their relative movements.
Price changes as measured by the HICPs, the Monetary Union Index of Consumer Prices (MUICP), the European Index of Consumer Prices (EICP) and the European Economic Area Index of Consumer Prices (EEAICP) are used as measures of inflation in the Member States, in the euro area, in the European Union, and in the European Economic Area.
The MUICP is used by, among others, the European Central Bank (ECB) as a main indicator for monetary policy management for the euro area (see ECB press release, 8 May 2003).
The Member States’ HICPs are supplied by the National Statistical Institutes; the MUICP, EICP and EEAICP are compiled by Eurostat. The HICP is computed as an annual chain index allowing weights to be changed each year. HICP aggregates are calculated as weighted averages of the HICPs using the weights of the countries and sub-indices concerned. The weight of a country is its share of the household final monetary consumption expenditure in the euro area total. For the MUICP this is expressed in euro, for the EICP and the EEAICP it is expressed in purchasing power standards. The MUICP is treated as a single entity within the EICP and EEAICP starting from 1999.
Additional information
More information on HICPs can be obtained from the monthly publication Statistics in focus, Economy and Finance, Harmonized indices of consumer prices. About 100 MUICP, EICP, EEAICP and HICP sub-indices with corresponding weights are available in Eurostat’s database. For technical notes on HICPs see: Eurostat News Release 21/97, 5 March 1997, Harmonizing the way EU measures inflation, Eurostat Memo 8/98, 4 May 1998, New monetary union index of consumer prices (MUICP), Eurostat Memo 02/00, 18 February 2000, Improved EU Harmonized Index of Consumer Prices: Extended coverage and earlier release dates for the HICP, and the HICP short guide for users. Further details can be found on the HICP section of the Eurostat website: http://epp.eurostat.ec.europa.eu/pls/portal/url/page/PGP_DS_HICP.
Future release dates
Provisional publication dates for the coming months are:
Index for MUICP flash estimates HICP News Releases January 2008 31 January 2008 29 February 2008 February 2008 3 March 2008 14 March 2008 March 2008 31 March 2008 16 April 2008 Euro area inflation is measured by the MUICP (’Monetary Union Index of Consumer Prices’ as defined in Council Regulation (EC) No 2494/95 of 23 October 1995) which is the official euro area aggregate. The euro area initially included Belgium, Germany, Ireland, Spain, France, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland. Greece was included from 1 January 2001, Slovenia from 1 January 2007, and Cyprus and Malta from 1 January 2008. Cyprus and Malta will be included in the calculation of euro area inflation for January 2008. New Member States are integrated into the MUICP using a chain index formula. The MUICP flash estimate for December 2007, published on 4 January 2008, was 3.1%. EU inflation is measured by the EICP (’European Index of Consumer Prices’ as defined in Council Regulation (EC) No 2494/95 of 23 October 1995) which is the official EU aggregate. The EU included 15 Member States until 30 April 2004, 25 Member States from 1 May 2004 until 31 December 2006 and 27 Member States from 1 January 2007. Bulgaria and Romania have been Member States of the EU since 1 January 2007 and have been included in the calculation of the EU inflation since January 2007. New Member States are integrated into the EICP using a chain index formula. Measure used to determine price stability in Convergence reports of 1998, 2000, 2002, 2004, 2006 and 2007 by the Commission to the Council. Data for Ireland for December 2007 were under embargo at the time of publication. However, Irish data were used to compute euro area, EU and EEA totals. In October 2006, Italy changed its price collection period. Collection is now taking place between the 1st and the 21st of the reference month. Until September 2006 the collection period was between the 16th of the previous month and the 15th of the reference month. Figures from October 2006 onwards may be subject to revision. Further information can be found on the website of ISTAT Italy at: http://www.istat.it/prezzi/precon/aproposito/dinamica/effettihicp_ottobre.pdf. Issued by: Eurostat Press Office Tim ALLEN Tel: +352-4301-33 444 mailto:eurostat-pressoffice@ec.europa.eu For further information on Methodology: Tatiana MRLIANOVA Christine WIRTZ Tel: +352-4301-38 137 mailto:estat-hicp-methods@ec.europa.eu Eurostat News Releases on the Internet:
http://ec.europa.eu/eurostat Selected Principal European Economic Indicators:
http://ec.europa.eu/eurostat/euroindicators
