Euro area annual inflation is expected to be 1.9% in May 2007 according to a flash estimate issued by Eurostat, the Statistical Office of the European Communities. The flash estimation procedure for the MUICP combines historical information with partial information on price developments in the most recent months to give a total index for the euro area. Experience has shown the procedure to be reliable (15 times exactly anticipating the inflation rate and 9 times differing by 0.1 over the last two years).
In April 2007, Eurozone annual inflation was 1.9%, unchanged compared with March. A year earlier the rate was 2.5%. Monthly inflation was 0.6% in April 2007.
The main components with the highest monthly rates were education (5.9%) and clothing (2.7%), and the lowest were recreation & culture (-0.6%) and communications (-0.1%). In particular, garments and fuels for transport (+0.11 percentage points each) had the largest upward impact, while package holidays (0.05) had the biggest downward impact.
The main components with the highest annual rates in April 2007 were education (9.2%), alcohol & tobacco (3.7%) and hotels & restaurants (3.1%), while the lowest annual rates were observed for communications (-2.2%), recreation & culture (0.0%), clothing, household equipment and transport (1.4% each). Concerning the detailed sub-indices, restaurants & cafés (+0.11 percentage points) and vegetables (+0.09) had the largest upward impacts on the headline rate, while fuels for transport (-0.14), telecommunications (-0.13) and heating oil (-0.09) had the biggest downward impacts.
In April 2007, the lowest annual rates were observed in Malta (-1.1%), France (1.3%) and Finland (1.5%), and the highest rates in Latvia (8.8%), Hungary (8.7%) and Estonia (5.6%). Compared with March, annual inflation rose in nine Member States, remained stable in eight and fell in ten.
The lowest 12-month averages4 up to April 2007 were recorded in Finland (1.3%), the Netherlands, Poland and Sweden (1.6% each) and the highest in Latvia (7.0%), Bulgaria and Hungary (6.2% each).
Harmonised Indices of Consumer Prices (HICPs) are used in the assessment of inflation convergence as required under Article 121 of the Treaty of Amsterdam. They form the basis for 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).