Harmonised Index of Consumer Prices of the European Union revised

The coverage of the Harmonised Index of Consumer Prices of the European Union was extended in January 2000. For Finland the Harmonised Index now covers around 85 per cent of the consumption of the national Consumer Price Index.

The EU Member States have calculated the Harmonised Index of Consumer Prices since January 1997. The index is the official inflation indicator of the European Union. It has a significant role in the monetary policy of the European Central Bank. Other parties acting on the financial markets also use the Harmonised Index of Consumer Prices because it produces comparable inflation figures for the EU Member States.

In January 2000, education fees, insurance premiums and part of health care and social service charges were added to the Harmonised Index of Consumer Prices. The coverage of health care and social services will be supplemented further at the beginning of 2001 by including in the index hospital fees and charges of home services and institutional housing, such as care fees for old age homes.

The consumption of tourists and institutional households, such as residents of old age homes and conscripts, was included in the Harmonised Index of Consumer Prices. The Finnish national Consumer Price Index does not yet cover the consumption of these groups. Of total consumption, tourists account for approximately 3.5 per cent and institutional residents for about 0.3 per cent, excluding care fees for old age homes.

After the coverage was increased, the main groups health care, and hotels and restaurants have a larger weight than earlier in the Harmonised Index.

According to the Harmonised Index of Consumer Prices, the rate of inflation in the EU Member States stood at 1.8 per cent in January. Inflation accelerated, since it was 1.7 per cent in December 1999. Of the EU Member States, inflation was fastest in Ireland, where prices rose by 4.4 per cent, and slowest in Great Britain, at 0.8 per cent. The corresponding rate for Finland was 2.3 per cent. In the member countries of the EMU consumer prices rose by 2.0 per cent in January.

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Inflation indicators of the European Union, January 2000
	Point figure	Change on one year
Harmonised Index of Consumer Prices of the EU countries (1996=100)	105.0	1.8%
Harmonised Index of Consumer Prices of the EMU countries (1996=100)	104.9	2.0%
Finland's Harmonised Index of Consumer Prices (1996=100)	104.8	2.3%

Source: Statistics Finland's Price Indices