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Published: 14 September 2011

Inflation 3.8 per cent in August

The year-on-year change in consumer prices, i.e. inflation, calculated by Statistics Finland slowed down slightly in August. It was 3.8 per cent in August, having been exactly four per cent in July. The slowing down of inflation was mainly due to the ending of the peak summer season for package tours and decreases in the prices of mobile communication services.

Inflation indicators in Finland, August 2011

	Point figure	Change on one year	Change on one month
Consumer Price Index 2010=100	103,6	3,8 %	0,4 %
Cost-of-living Index 1951:10=100	1 815
Harmonised Index of Consumer Prices 2005=100	114,1	3,5 %	0,2 %
Harmonised Index of Consumer Prices at Constant Taxes 2005=100	113,4	3,1 %	0,2 %

In August, consumer prices were pushed up most from the previous year by risen prices of housing and food. Housing prices were pushed up especially by risen electricity prices and housing loan interest rates, prices of owner-occupied flats and real estate, as well as rent increases. Food prices, in turn, were pushed up above all by increases in the prices of confectionery, ice cream, cereal, dairy and meat products, and coffee. Inflation was also influenced by increases in the prices of liquid fuels and the fading away of the impact of last year's lowering of VAT on food and non-alcoholic beverages in restaurant and cafés. Inflation was held back most in August by fallen prices of consumer electronics and mobile communication services from the year before.

From July to August consumer prices rose by 0.4 per cent, primarily due to the gradual ending of clothing sales.

Each mid-month, Statistics Finland interviewers collect altogether around 50,000 prices on 483 commodities from approximately 2,700 outlets for the Consumer Price Index. In addition, some 1,000 items of price data are gathered by centralised collection. Consumer Price Index 2005=100 Handbook for Users can be found on the CPI home page at www.stat.fi. The new Consumer Price Index 2010=100 Handbook for Users will be published later.

According to preliminary data, inflation in the euro area was 2.5 per cent in August

According to the preliminary data on the Harmonised Index of Consumer Prices, the rate of inflation in the euro area was in August unchanged from July, or 2.5 per cent. The corresponding figure for Finland in August was 3.5 per cent.

The Harmonised Index of Consumer Prices does not include owner-occupancy, games of chance, interests on consumption and other credits, fire insurance on owner-occupied dwellings or vehicle tax. The consumption items included in the Harmonised Index of Consumer Prices as well as the rules governing its compilation have been defined in EU regulations.

Eurostat’s estimate of inflation in the euro area is based on preliminary data from the Member States and on the price development of energy. Eurostat will publish detailed data on Harmonised Indices of Consumer Prices for August on 15 September. Information of inflation in EU countries is available on Eurostat homepage, eurostat (http://ec.europa.eu/eurostat).

The year-on-year change in the Harmonised Index of Consumer Prices at Constant Taxes was 3.1 per cent in August

The year-on-year change in the Harmonised Index of Consumer Prices thus stood at 3.5 per cent in August and that in the Index at Constant Taxes measuring market inflation at 3.1 per cent. Over twelve months, the combined raising impact on consumer prices from changes in commodity tax rates was thus 0.4 percentage points. The month-on-month change in both the Harmonised Index and the Index of Consumer Prices at Constant Taxes was 0.2 per cent in August. There were no changes in tax rates in August.

Harmonised Index of Consumer Prices at Constant Taxes

The inflation measured by Consumer Price Index consists mainly of products and services priced by enterprises and the public sector, and value added and commodity taxes. Some 25 per cent of the private consumption described by the Harmonised Index of Consumer Prices (HICP) consists of value added or other taxes. The Harmonised Index of Consumer Prices at Constant Taxes (HICP-CT) is based on the HICP so the two indices have the same weight structure and price data. HICP-CT is calculated with a method which holds the tax rate constant relative to the reference period. When tax changes take place, the impact of the tax change on commodity prices is eliminated from HICP-CT. The price impact of the tax changes is obtained by comparing the development of the HICP and HICP-CT.

Source: Consumer Price Index, Statistics Finland

Inquiries: Juhani Pekkarinen (09) 1734 3476, Mari Ylä-Jarkko (09) 1734 3310, khi@stat.fi

Director in charge: Kari Molnar

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Appendix tables

• Appendix table 1. Consumer Price Index 2010=100 by commodity groups (14.9.2011)
• Appendix table 2. Cost-of-living Index 1951:10=100 (14.9.2011)
• Appendix table 3. Year-on-year changes in the Consumer Price Index (14.9.2011)
• Appendix table 4. Consumer Price Index 2000=100 (14.9.2011)
• Appendix table 5. Consumer Price Index 2005=100 (14.9.2011)

Figures

• Appendix figure 1. Annual change in the Consumer Price Index and the Harmonised Index of Consumer Prices, January 2001 - August 2011 (14.9.2011)
• Appendix figure 2. Goods and services with the largest impact on the year-on-year change in the Consumer Price Index, August 2011 (14.9.2011)
• Appendix figure 3. Annual change in the Harmonised Index of Consumer Prices and the Harmonised Index of Consumer Prices at Constant Taxes, January 2007 - August 2011 (14.9.2011)
• Appendix figure 4. Harmonised Index of Consumer Price Index 2005=100; Finland, Euro area and EU (14.9.2011)

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Updated 14.9.2011