Core Inflation (HICP) in Eurozone

Measures the year-on-year change in the euro area Harmonised Index of Consumer Prices (HICP) excluding energy and unprocessed food. It is the core inflation gauge the ECB uses as a benchmark to assess the area's underlying price pressures. It is published by Eurostat.

It is compiled in the same way as the headline HICP (prices weighted by the harmonised consumption basket, with a base year), but stripping out the energy and unprocessed food groups, whose prices show high seasonal or short-term variability. It is expressed as a year-on-year (YoY) rate of change.

By removing the most erratic components it offers a cleaner signal of underlying inflationary pressure, so the ECB watches it closely to steer monetary policy. A higher-than-expected reading tends to push rate expectations up and strengthen the euro.

By excluding energy and unprocessed food it does not capture the real cost households bear when those prices rise sharply, so it should be read alongside the headline HICP. As a euro area aggregate, it is subject to revisions when countries submit their final data.