Euro area1 annual inflation2 is expected to be 2.3% in August 2006 according to a flash estimate issued by Eurostat, the Statistical Office of the European Communities. It was 2.4% in July3.

Computation of flash estimates

Euro area inflation is measured by the Monetary Union Index of Consumer Prices (MUICP). To compute the MUICP flash estimates, Eurostat uses early price information relating to the reference month from Member States for which data are available4 as well as early information about energy prices.

The flash estimation procedure for the MUICP combines historical information with partial information on price developments in the most recent months to give a total index for the euro area. No detailed breakdown is available. Experience has shown the procedure to be reliable (14 times exactly anticipating the inflation rate, 9 times differing by 0.1 and once differing by 0.2, in January 2005, over the last two years). Further information can be found in Eurostat News Release 113/2001 of 5 November 2001.

Future provisional publication dates

Index for MUICP flash estimates News release on MUICP, EU25 and Member States August 2006 - 15 September 2006 September 2006 29 September 2006 17 October 2006 October 2006 31 October 2006 16 November 2006

The Member States participating in the euro area are Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland. Annual inflation is the price change between the current month and the same month of the previous year. See News Release 108/2006 of 17 August 2006. The MUICP flash estimate includes early price information representing approximately 95% of the euro area total consumption expenditure weight (see News Release 53/2006 of 28 April 2006).

Issued by: Eurostat Press Office Tim ALLEN BECH Building L-2920 LUXEMBOURG Tel: +352-4301-33 444 Fax: +352-4301-35 349 eurostat-pressoffice@ec.europa.eu For further information on data: Keith HAYES Tel: +352-4301-38 137 Fax: +352-4301-33 989 estat-hicp-methods@ec.europa.eu Eurostat News Releases on the Internet: http://ec.europa.eu/eurostat/

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