Euro area annual inflation down to 3.3%

Euro area1 annual inflation was 3,3% in April 20082, down from 3,6% in March, a year earlier the rate was 1,9%, monthly inflation was 0,3% in April 2008.

EU3 annual inflation was 3.6% in April 2008, down from 3.8% in March. A year earlier the rate was 2.2%. Monthly inflation was 0.4% in April 2008.
These figures come from Eurostat, the Statistical Office of the European Communities.

Inflation in the EU Member States

In April 2008, the lowest annual rates were observed in the Netherlands (1.7%), Portugal (2.5%) and Germany (2.6%), and the highest in
Latvia (17.4%), Bulgaria (13.4%) and Lithuania (11.9%). Compared with March 2008, annual inflation rose in eight Member States, remained
stable in four and fell in fifteen.
The lowest 12-month averages4 up to April 2008 were registered in the Netherlands (1.7%), Malta (1.9%), Denmark, Sweden and the United
Kingdom (2.2% each), and the highest in Latvia (13.0%), Bulgaria (10.1%) and Estonia (8.8%).

Euro area

The main components with the highest annual rates in April 2008 were food (6.0%), housing and transport (4.8% each), while the lowest annual rates were observed for communications (-1.6%),
recreation & culture (-0.4%) and clothing (0.8%). Concerning the detailed sub-indices, fuels for transport ( 0.41 percentage points), heating oil ( 0.25), milk, cheese & eggs ( 0.24)
and bread & cereals ( 0.16) had the largest upward impacts on the headline rate, while cars (-0.16), telecommunications (-0.15) and garments (-0.14) had the biggest downward impacts.

The main components with the highest monthly rates were clothing (2.5%), housing (0.6%) and food (0.5%), and the lowest were recreation & culture (-1.6%), communications (-0.1%) and
education (0.1%). In particular, garments ( 0.11 percentage points), footwear ( 0.04), heating oil, gas, vegetables and fuels for transport ( 0.02 each) had the largest upward impacts, while
package holidays (-0.13), gardens, plants & flowers, accommodation services and telecommunications (-0.02 each) had the biggest downward impacts.

Annual inflation (%) in April 2008 in ascending order – Euro area

NL

PT

DE 5

IE

FI

Euro area

FR

AT

IT

BE

MT

ES

CY

LU

EL

SI

1.7p

2.5

2.6

3.3

3.3

3.3p

3.4

3.4p

3.6

4.1

4.1

4.2

4.3

4.3

4.4

6.2

EU Member States outside the euro area

UK

SE

DK

EU

SK

PL

CZ

HU

RO

EE

LT

BG

LV

3.0

3.2

3.4

3.6p

3.7

4.3

6.7

6.8

8.7

11.6

11.9

13.4

17.4

Inflation rates in %, measured by HICPs

Annual rates

12 month average rates 4

Apr 08-07
Apr 07-06

Monthly rates

Apr 08
Mar 08

Apr 08
Apr 07

Mar 08
Mar 07

Feb 08
Feb 07

Jan 08
Jan 07

Apr 07
Apr 06

Belgium (BE)
Germany (DE) 5
Ireland (IE)
Greece (EL)
Spain (ES)
France (FR)
Italy (IT)
Cyprus (CY)
Luxembourg (LU)
Malta (MT)
Netherlands (NL)
Austria (AT)
Portugal (PT)
Slovenia (SI)
Finland (FI)

4.1
2.6
3.3
4.4
4.2
3.4
3.6
4.3
4.3
4.1
1.7p
3.4p
2.5
6.2
3.3

4.4
3.3
3.7
4.4
4.6
3.5
3.6
4.4
4.4
4.3
1.9
3.5
3.1
6.6
3.6

3.6
3.0
3.5
4.5
4.4
3.2
3.1
4.7
4.2
4.0
2.0
3.1
2.9
6.4
3.3

3.5
2.9
3.1
3.9
4.4
3.2
3.1
4.1
4.2
3.8
1.8
3.1
2.9
6.4
3.5

1.8
2.0
2.9
2.6
2.5
1.3
1.8
1.6
2.5
-1.1
1.9
1.8
2.8
2.9
1.5

2.5
2.6
3.1
3.5
3.5
2.3
2.5
3.2
3.3
1.9
1.7p
2.7p
2.5
5.0
2.3

0.2
-0.3
0.1
0.8
1.1
0.4
0.6
1.2
0.5
2.3
0.4p
0.3p
0.3
0.7
0.2

Euro area (MUICP)

3.3p

3.6

3.3

3.2

1.9

2.6p

0.3p

Bulgaria (BG)
Czech Republic (CZ)
Denmark (DK)
Estonia (EE)
Latvia (LV)
Lithuania (LT)
Hungary (HU)
Poland (PL)
Romania (RO)
Slovakia (SK)
Sweden (SE)
United Kingdom (UK)

13.4
6.7
3.4
11.6
17.4
11.9
6.8
4.3
8.7
3.7
3.2
3.0

13.2
7.1
3.3
11.2
16.6
11.4
6.7
4.4
8.7
3.6
3.2
2.5

12.2
7.6
3.3
11.5
16.5
10.9
6.7
4.6
8.0
3.4
2.9
2.5

11.7
7.9
3.0
11.3
15.6
10.0
7.4
4.4
7.3
3.2
3.0
2.2

4.4
2.7
1.7
5.6
8.8
4.9
8.7
2.2
3.8
2.0
1.6
2.8

10.1
4.8
2.2
8.8
13.0
8.0
7.3
3.4
6.4
2.4
2.2
2.2

0.7
0.4
0.4
1.0
1.6
1.3
0.6
0.4
0.5
0.3
0.5
0.8

EU (EICP)

3.6p

3.8

3.5

3.4

2.2

2.8p

0.4p

Iceland (IS)
Norway (NO)

10.7
2.7

6.8
2.8

4.5
3.1

3.1
2.9

4.2
0.5

3.9
1.4

3.9
0.0

EEA (EEAICP)

3.6p

3.7

3.5

3.4

2.2

2.8p

0.4p

Switzerland (CH) 6

2.3

2.5

2.3

2.5

0.5

1.5

0.9

Source: Eurostat
p = provisional

Euro area inflation rates in % for main components, measured by HICPs

Euro area (MUICP)

Weight used in 2008

Annual rates

12 month average rates4

Apr 08-07
Apr 07-06

Monthly rates

Apr 08
Mar 08

Apr 08
Apr 07

Mar 08
Mar 07

Feb 08
Feb 07

Jan 08
Jan 07

Apr 07
Apr 06

00 All-items
01 Food
02 Alcohol and tobacco
03 Clothing
04 Housing
05 Household equipment
06 Health
07 Transport
08 Communications
09 Recreation and culture
10 Education
11 Hotels and restaurants
12 Miscellaneous

1000.0
157.8
37.2
68.3
153.0
70.1
40.5
156.6
156.6
96.8
10.4
92.8
83.6

3.3p
6.0p
3.2p
0.8p
4.8p
2.2p
1.6p
4.8p
-1.6p
-0.4p
3.6p
3.2p
2.4p

3.6
6.2
3.1
1.0
4.4
2.2
1.6
5.6
-1.5
0.6
9.6
3.6
2.4

3.3
5.8
3.0
1.0
4.0
2.1
2.1
5.4
-3.1
0.0
9.6
3.3
2.3

3.2
5.4
2.9
0.5
4.0
2.0
2.0
5.6
-2.9
0.1
9.4
3.2
2.2

1.9
2.5
3.7
1.4
2.5
1.4
2.2
1.4
-2.2
0.0
9.2
3.1
2.3

2.6p
3.9p
3.2p
0.9p
3.2
1.9p
1.6p
3.8p
-1.9p
0.1p
8.8p
3.3p
2.3p

0.3p
0.5p
0.3p
2.5p
0.6p
0.2p
0.3p
0.3p
-0.1p
-1.6p
0.1p
0.2p
0.2p

All-items
-excl. energy
-excl. energy, FoodAlcTob*
-excl. energy, unproc. food
-excl. energy, seas. food
-excl. tobacco
Energy
FoodAlcTob*

901.9
706.8
825.8
862.6
862.6
98.1
195.0

2.5p
1.6p
2.4p
2.4p
3.3p
10.8p
5.4p

2.8
2.0
2.7
2.7
3.6
11.2
5.6

2.5
1.8
2.4
2.5
3.3
10.4
5.2

2.4
1.7
2.3
2.4
3.2
10.6
4.9

2.1
1.9
1.9
2.0
1.8
0.4
2.7

2.3p
1.9p
2.2p
2.2p
2.6p
5.8p
3.8p

0.2p
0.2p
0.2p
0.2p
0.3p
1.0p
0.5p

Source: Eurostat
* FoodAlcTob = Food, alcohol and tobacco
p = provisional

Euro area sub-indices with most important impacts

COICOP

April 08 / April 07

Weight (?) 2008

Rate (%)

Impact (percentage points)

07.22
04.53
01.14
01.11
04.52
01.16

09.13
01.17
04.11/2
03.12
08.2/3
07.11

Fuels for transport
Heating oil
Milk, cheese and eggs
Bread and cereals
Gas
Fruit

IT equipment
Vegetables
Rents
Garments
Telecommunications
Cars

45.7
9.1
23.0
23.0
15.4
12.1

5.1
15.7
60.0
50.4
31.2
44.2

12.0p
34.2p
14.4p
9.2p
7.5p
8.2p

-13.8p
-2.0p
1.8p
0.6p
-1.7p
-0.1p

0.41
0.25
0.24
0.16
0.07
0.06

-0.08
-0.09
-0.09
-0.14
-0.15
-0.16

April 08 / March 08

03.12
03.21/2
04.53
04.53
01.17
07.22

04.11/2
07.11
08.2/3
11.20
09.33
09.60

Garments
Footwear
Heating oil
Gas
Vegetables
Fuels for transport

Rents
Cars
Telecommunications
Accommodation services
Gardens, plants and flowers
Package holidays

50.4
14.0
9.1
15.4
15.7
45.7

60.0
44.2
31.2
17.2
6.5
15.9

2.5p
2.9p
2.7p
2.7p
1.5p
0.7p

0.2p
0.0p
-0.2p
-0.6p
-2.6p
-8.2p

0.11
0.04
0.02
0.02
0.02
0.02

-0.01
-0.01
-0.02
-0.02
-0.02
-0.13

Source: Eurostat
p= 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: .

Future release dates
Provisional publication dates for the coming months are:

Index for

MUICP flash estimates

HICP News Releases

May 2008

30 May 2008

16 June 2008

June 2008

30 June 2008

16 July 2008

July 2008

31 July 2008

14 August 2008

1. 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. New Member States are integrated into the MUICP using a chain index formula.

2. The MUICP flash estimate for April 2008, published on 30 April 2008, was 3.3%.

3. 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. New Member States are integrated into the EICP
using a chain index formula.

4. Measure used to determine price stability in Convergence reports of 1998, 2000, 2002, 2004, 2006 and 2007 by the Commission to the Council.

5. Price collection periods for the German HICP have been adjusted from January 2008 onwards to be in line with the temporal coverage regulation. Further information on the impact can be found
on the German statistical office website at: under
‘Methodological note.

6. Switzerland started producing HICPs from January 2008. HICP estimates for 2005-2007 are not fully compliant with HICP methodology.