This week, 25 years ago, on March 7, 1997, the Harmonised Index of Consumer Prices (HICP) was officially launched. The HICP measures inflation, in other words, changes over time in the prices of consumer goods and services purchased by households. This indicator is called “harmonised” because all the countries in the EU follow a common methodology, ensuring that data for one country can be compared with the data for another and that figures can be added up to euro area and EU totals.
This milestone indicator followed years of work, starting with the requirements of the 1992 Maastricht Treaty. Since then, it has become one of the flagship statistics of Eurostat and one of the most important measures used in EU economic and monetary decision making, especially at the euro area level. From the start, the European Central Bank (ECB) has used it as the principal measure for its price stability policy, by setting interest rates with the aim to keep inflation close but below 2 %, year on year.
In the eve of the euro introduction in 2002, celebrating 20 years this year, the ECB and financial markets asked for quicker availability of the HICP. In response, Eurostat started producing a ‘flash estimate’ in November 2001, and since then reliable first figures for the inflation rates are published around the last day of each month.
The HICP has been developed and improved over the years through Council and Parliament regulations and Commission decisions and regulations as well as through the HICP methodological manual. Financial assistance has also been provided to the Member States and compliance monitoring visits allow Eurostat to assess compliance with the legal requirements but also to recommend improvements to national HICPs.
For more information:
- Eurostat set of Statistics Explained articles on HICP
- Eurostat dedicated section on HICP
- Eurostat database on HICP
- Eurostat visualizations on HICP
- Eurostat Education Corner webpage on videos and exercises, including price statistics
- Eurostat Statistics 4 beginners on inflation