172/2010 - 16 November 2010

October 2010
Euro area annual inflation up to 1.9%
EU up to 2.3%

Euro area1 annual inflation was 1.9% in October 20102, up from 1.8% in September. A year earlier the rate was
-0.1%. Monthly inflation was 0.4% in October 2010.
EU3 annual inflation was 2.3% in October 2010, up from 2.2% in September. A year earlier the rate was 0.5%.
Monthly inflation was 0.3% in October 2010.
These figures come from Eurostat, the statistical office of the European Union.

Inflation in the EU Member States

In October 2010, the lowest annual rates were observed in Ireland (-0.8%), Latvia (0.9%) and Slovakia (1.0%),
and the highest in Romania (7.9%), Greece (5.2%) and Estonia (4.5%). Compared with September 2010, annual
inflation rose in fifteen Member States, remained stable in six and fell in five.
The lowest 12-month averages4 up to October 2010 were registered in Ireland (-1.9%), Latvia (-1.8%) and
Slovakia (0.5%) and the highest in Romania (5.5%), Hungary (4.9%) and Greece (4.3%).

Euro area
The main components with the highest annual rates in October 2010 were transport (4.3%), alcohol & tobacco
(3.4%) and housing (3.2%), while the lowest annual rates were observed for communications (-1.1%), recreation &
culture (0.1%) and clothing (0.4%). Concerning the detailed sub-indices, fuels for transport (+0.44 percentage
points), heating oil (+0.14) and gas (+0.08) had the largest upward impacts on the headline rate, while
telecommunications (-0.10) and garments (-0.09) had the biggest downward impacts.
The main components with the highest monthly rates were clothing (3.3%), education (0.6%) and housing (0.4%),
while the lowest were communications (-0.3%), recreation & culture and hotels & restaurants (0.0% each). In
particular, garments (+0.16 percentage points) and footwear (+0.04) had the largest upward impacts, while
package holidays (-0.03) had the biggest downward impact.

Annual inflation (%) in October 2010 in ascending order

Euro area
Euro
IE SK DE NL FR AT IT SI MT ES PT FI LU BE CY EL
area
-0.8 1.0 1.3 1.4p 1.8 1.9p 1.9p 2.0 2.1 2.2 2.3 2.3 2.3 2.9 3.1 3.2 5.2

EU Member States outside the euro area

LV SE CZ EU DK LT PL UK5 BG HU EE RO
Sep 10
0.9 1.6 1.8 2.3p 2.4 2.6 2.6 3.6 4.3 4.5 7.9
3.1
 Inflation rates in %, measured by HICPs
12 month
Monthly
Annual rates average
rates
rates4
Oct 10 Sep 10 Aug 10 Jul 10 Oct 09 Oct 10-09 Oct 10
Oct 09 Sep 09 Aug 09 Jul 09 Oct 08 Oct 09-08 Sep 10
Belgium (BE) 3.1 2.9 2.4 2.4 -0.9 1.8 0.1
Germany (DE) 1.3 1.3 1.0 1.2 -0.1 1.0 0.1
Ireland (IE) -0.8 -1.0 -1.2 -1.2 -2.8 -1.9 0.1
Greece (EL) 5.2 5.7 5.6 5.5 1.2 4.3 0.1
Spain (ES) 2.3 2.1 1.8 1.9 -0.6 1.5 0.9
France (FR) 1.8 1.8 1.6 1.9 -0.2 1.5 0.1
Italy (IT) 2.0 1.6 1.8 1.8 0.3 1.5 0.7
Cyprus (CY) 3.2 3.6 3.4 2.7 -1.0 2.5 0.6
Luxembourg (LU) 2.9 2.6 2.5 2.9 -0.2 2.7 0.1
Malta (MT) 2.2 2.4 3.0 2.5 -0.5 1.4 -0.6
Netherlands (NL) 1.4p 1.4 1.2 1.3 0.4 0.8p 0.2p
Austria (AT) 1.9p 1.7r 1.6 1.7 0.1 1.5p 0.3p
Portugal (PT) 2.3 2.0 2.0 1.9 -1.6 0.9 0.3
Slovenia (SI) 2.1 2.1 2.4 2.3 0.2 2.1 0.1
Slovakia (SK) 1.0 1.1 1.1 1.0 -0.1 0.5 0.0
Finland (FI) 2.3 1.4 1.3 1.3 0.6 1.5 0.4
Euro area (MUICP) 1.9p 1.8 1.6 1.7 -0.1 1.4p 0.4p
Bulgaria (BG) 3.6 3.6 3.2 3.2 0.3 2.5 0.2
Czech Republic (CZ) 1.8 1.8 1.5 1.6 -0.6 0.9 -0.3
Denmark (DK) 2.4 2.5 2.3 2.1 0.6 1.9 -0.1
Estonia (EE) 4.5 3.8 2.8 2.8 -2.1 1.5 0.6
Latvia (LV) 0.9 0.3 -0.4 -0.7 -1.2 -1.8 0.3
Lithuania (LT) 2.6 1.8 1.8 1.7 1.0 0.9 0.4
Hungary (HU) 4.3 3.7 3.6 3.6 4.2 4.9 0.4
Poland (PL) 2.6 2.5 1.9 1.9 3.8 2.8 0.3
Romania (RO) 7.9 7.7 7.6 7.1 4.3 5.5 0.6
Sweden (SE) 1.6 1.5 1.1 1.4 1.8 2.0 0.3
5
United Kingdom (UK) : 3.1 3.1 3.1 1.5 : :
EU (EICP) 2.3p 2.2 2.0 2.1 0.5 1.9p 0.3p
Iceland (IS) 4.6 5.1 5.9 6.2 13.8 8.8 0.7
Norway (NO) 1.7 1.4 1.7 1.8 0.8 2.3 0.1
EEA (EEAICP) 2.3p 2.2 2.0 2.1 0.5 1.9p 0.3p
Switzerland (CH) 0.2 0.3 0.2 0.4 -1.0 0.6 0.6
Source: Eurostat p = provisional : = data not available r = revised
 Euro area inflation rates in % for main components, measured by HICPs
Weight 12 month
Monthly
used in Annual rates average
rates
2010 rates4
Oct 10 Sep 10 Aug 10 Jul 10 Oct 09 Oct 10-09 Oct 10
Euro area (MUICP)
Oct 09 Sep 09 Aug 09 Jul 09 Oct 08 Oct 09-08 Sep 10
00 All-items 1000.0 1.9p 1.8 1.6 1.7 -0.1 1.4p 0.4p
01 Food 153.4 1.2p 1.2 1.1 0.8 -1.5 -0.1p 0.1p
02 Alcohol and tobacco 38.3 3.4p 3.2 3.3 3.3 4.4 4.0p 0.3p
03 Clothing 67.4 0.4p 0.2 0.2 0.7 0.3 0.3p 3.3p
04 Housing 154.2 3.2p 2.9 2.6 2.7 -1.6 1.3p 0.4p
05 Household equipment 71.0 0.6p 0.6 0.5 0.5 1.4 0.8p 0.1p
06 Health 42.6 1.0p 0.9 0.8 0.8 1.1 0.9p 0.3p
07 Transport 153.0 4.3p 4.1 3.3 4.5 -2.0 4.3p 0.1p
08 Communications 32.6 -1.1p -0.9 -0.5 -0.9 -0.3 -0.8p -0.3p
09 Recreation and culture 96.7 0.1p -0.2 -0.1 -0.3 0.3 -0.2p 0.0p
10 Education 10.8 1.7p 2.2 2.3 1.7 1.5 1.7p 0.6p
11 Hotels and restaurants 93.2 1.5p 1.4 1.3 1.3 1.3 1.2p 0.0p
12 Miscellaneous 86.7 2.3p 2.3 2.3 2.2 2.2 2.1p 0.2p
All-items
-excl. energy 904.4 1.2p 1.2 1.1 1.1 0.8 0.9p 0.3p
-excl. energy, FoodAlcTob* 712.7 1.1p 1.0 1.0 1.0 1.2 1.0p 0.4p
-excl. energy, unproc. food 831.4 1.1p 1.0 1.0 1.0 1.0 0.9p 0.4p
-excl. energy, seas. food 867.5 1.1p 1.0 1.0 1.0 1.0 0.9p 0.3p
-excl. tobacco 976.2 1.8p 1.7 1.5 1.7 -0.3 1.3p 0.4p
Energy 95.6 8.5p 7.7 6.1 8.1 -8.5 5.7p 0.6p
FoodAlcTob* 191.7 1.7p 1.6 1.5 1.3 -0.4 0.7p 0.1p
Source: Eurostat * FoodAlcTob = Food, alcohol and tobacco p = provisional

Euro area sub-indices with most important impacts

Impact
Weight (‰)
Rate (%) (percentage
COICOP October 10 / October 09 2010
points)
07.22 Fuels for transport 42.4 11.9p 0.44
04.53 Heating oil 7.7 20.1p 0.14
04.52 Gas 15.4 6.9p 0.08
02.20 Tobacco 23.8 4.9p 0.07
01.17 Vegetables 14.7 6.1p 0.06
12.31 Jewellery and watches 5.3 12.9p 0.06
09.11 Audio-visual equipment 4.7 -8.0p -0.05
07.11 Cars 38.9 0.7p -0.05
01.11 Bread and cereals 26.0 -0.0p -0.05
01.12 Meat 36.1 0.4p -0.06
03.12 Garments 49.7 0.2p -0.09
08.2/3 Telecommunications 30.9 -1.2p -0.10
October 10 / September 10
03.12 Garments 49.7 3.6p 0.16
03.21/2 Footwear 13.8 3.1p 0.04
04.55 District heating 5.2 2.9p 0.01
04.51 Electricity 23.9 0.7p 0.01
04.53 Heating oil 7.7 1.2p 0.01
09.51 Books 6.0 1.4p 0.01
01.17 Vegetables 14.7 -0.7p -0.02
07.11 Cars 38.9 -0.1p -0.02
11.20 Accommodation services 16.7 -0.7p -0.02
04.11/2 Rents 60.0 0.0p -0.02
08.2/3 Telecommunications 30.9 -0.3p -0.02
09.60 Package holidays 15.7 -1.5p -0.03
Source: Eurostat p = provisional
Measures of inflation
An 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.
A 12-month average rate 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.
A monthly rate compares price levels between the two latest months. Although up-to-date, it can be affected by seasonal and
other effects.
An 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 harmonised inflation figures required under the Treaty on the Functioning
of the European Union. They are designed for international comparison of consumer price inflation.
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. HICPs are computed as annual chain indices 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 total of the country group. 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 Data in focus, Economy and Finance on "Harmonized
indices of consumer prices". About 100 MUICP, EICP, EEAICP and HICP sub-indices with corresponding weights are available
in Eurostat’s database. Further details can be found on the HICP section of the Eurostat website:
http://epp.eurostat.ec.europa.eu/portal/page/portal/hicp/introduction.

Future release dates

Scheduled publication dates for the coming months are:
Index for MUICP flash estimates HICP News Releases
November 2010 30 November 2010 16 December 2010
December 2010 4 January 2011 14 January 2011
January 2011 31 January 2011 28 February 2011

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 January 2001, Slovenia from January 2007, Cyprus and Malta from January 2008 and Slovakia from January 2009.
New Member States are integrated into the MUICP using a chain index formula.
2. The MUICP flash estimate for October 2010, published on 29 October 2010, was 1.9%.
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 April 2004,
25 Member States from May 2004 until December 2006 and 27 Member States from 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 by the Commission to the Council.
5. Data for the United Kingdom for October 2010 were not available in time for publication. Due to this fact, EU and EEA totals
were calculated using Eurostat estimates.

Issued by: For further information on methodology:

Eurostat Press Office
Tatiana MRLIANOVA
Tim ALLEN Jarko PASANEN
Tel: +352-4301-33 444 Tel: +352-4301-32 636
[email protected] [email protected]

Eurostat News Releases on the internet: http://ec.europa.eu/eurostat

Selected Principal European Economic Indicators: http://ec.europa.eu/eurostat/euroindicators