Harmonised measurement of inflation across the EU

SUMMARY OF:

Regulation (EU) 2016/792 — harmonised indices of consumer prices and the house price index

WHAT IS THE AIM OF THE REGULATION?

It lays down a common set of rules for developing, producing and disseminating harmonised national and EU indices of consumer and house prices.

KEY POINTS

The legislation applies to the following:
- the harmonised index of consumer prices* (HICP);
- the harmonised index of consumer prices at constant tax rates (HICP-CT);
- the harmonised price index for owner-occupied housing (OOH);
- the harmonised house price index (HPI).
EU countries’ national authorities:
- provide the European Commission’s statistical office, Eurostat, with the harmonised indices;
- update the product category weightings for the indices every year.
Any changes in the prices of dwellings purchased by households or of other products that households buy in their capacity as owner occupiers of dwellings are included in the OOH but excluded from the HICP and HICP-CT.
Furthermore, data for the following are not included in the HICP and HICP-CT:
- narcotics;
- gambling;
- prostitution;
- life insurance;
- financial intermediation services indirectly measured (FISIM) — the value of financial intermediation services is provided, but not directly charged for, by financial institutions.
The Commission may adopt further measures, provided these do not impose a significant additional burden on national authorities, to ensure the comparable harmonised indices are produced under uniform conditions. These cover:
- sampling and representativity;
- collection and treatment of prices;
- replacements and quality adjustment;
- index compilation;
- revisions;
- special indices;
- treatment of products* in specific areas.
National authorities provide Eurostat with HICP and HICP-CT data every month and with the HPI and OOH data every quarter.
The harmonised indices and subindices are adjusted to a new common index reference when a major methodological change takes place, or every 10 years from 2015.
The Commission had to prepare a report on the integration of the OOH price index into the HICP coverage by 31 December 2018.
The Commission had to prepare a report on the use of delegated powers by 13 September 2020.

Implementing act

In 2020, the Commission adopted Implementing Regulation (EU) 2020/1148, which lays down the methodological and technical specifications in accordance with Regulation (EU) 2016/792 as regards harmonised indices of consumer prices and the house price index. The regulation:

establishes uniform conditions for producing:
- the HICP and the HICP-CT and
- the OOH price index and the HPI;
integrates the relevant rules from — and repeals — Regulations (EC) No 1749/96, (EC) No 2214/96, (EC) No 1687/98, (EC) No 2646/98, (EC) No 1617/1999, (EC) No 2166/1999, (EC) No 2601/2000, (EC) No 2602/2000, (EC) No 1920/2001, (EC) No 1921/2001, (EC) No 1708/2005, (EC) No 701/2006, (EC) No 330/2009, (EU) No 1114/2010 and (EU) No 93/2013, adopted on the basis of Regulation (EC) No 2494/95 (which Regulation (EU) 2016/792 also replaces and repeals).

FROM WHEN DOES THE REGULATION APPLY?

Regulation (EU) 2016/792 has applied since 13 June 2016. It was used for the first time for January 2017 data.

BACKGROUND

The HICP measures inflation rates at national and EU level. The Commission and the European Central Bank use the index to assess price stability in EU countries and in the euro area.
High-quality comparable price statistics are essential for those responsible for public policy in the EU, researchers and all EU citizens.

For more information, see:

Harmonised Indices of Consumer Prices (HICP) Legislation (European Commission)
Harmonised index of consumer prices (HICP) (prc_hicp) (European Commission).

KEY TERMS

Consumer price: the purchase price that households pay, through monetary transactions, to buy individual products.

Products: goods and services.

MAIN DOCUMENT

Regulation (EU) 2016/792 of the European Parliament and of the Council of 11 May 2016 on harmonised indices of consumer prices and the house price index, and repealing Council Regulation (EC) No 2494/95 (OJ L 135, 24.5.2016, pp. 11-38)