The impact of a single price change on the HICP depends on how much households spend, on average, on thatĮxample coffee: coffee (together with tea and cocoa) has a weight of 0.4%. The HICP, supported by a set of legally binding standards, does precisely this. The introduction of the euro made it necessary to have a means of measuring inflation for the entire euro area, without gaps or overlaps and in a way that could be compared across countries. Maintaining price stability is so important Comparable across countriesīefore the euro became our common currency, each country measured inflation using its own national methods and procedures. We do this by making sure that inflation – the rate at which the prices change over time – remains low, stable and predictable: 2% over the medium term. It is like a map that helps us at the ECB to make the right decisions. This measure is a good way of keeping track of how prices change in the economy. This ensures that the data for one country can be compared with The term “harmonised” denotes the fact that all the countries in theĮuropean Union follow the same methodology. In the euro area, consumer price inflation is measured by the “Harmonised Index of Consumer Prices”, often
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