Definition: Inflation (measures of)
The annual rate measures the price change between the current month and the same month of the previous year. This measure is responsive to recent changes in price levels but can be influenced by one-off effects in either month.
The 12-month average rate overcomes this volatility by comparing average Harmonized Indices of Consumer Prices (HICPs) in the latest 12 months to the average of the previous 12 months. This measure is less sensitive to transient changes in prices.
The monthly rate compares price levels between the two latest months. Although up-to-date, it can be affected by seasonal and other effects.
The impact of a particular component measures the change in the headline inflation due to the inclusion of that component in the HICP. The impact takes account of both the weight and whether the inflation for that component is higher or lower than the all-items inflation rate. For example, the impact of "tobacco" is equal to the difference between the all-items inflation rate and the rate for "all-items excluding tobacco". Impacts are not strictly additive.
Eurostat, News releases Euroindicators, No. 36/2009, 16 March 2009, Eurostat Press Office, Luxembourg, 2009