VINACHEM

Euroarea annual inflation was 2.2% in November 2012, down from 2.5%in October2. A year earlier the rate was 3.0%. Monthly inflation was -0.2% inNovember 2012.

EUannual inflation was 2.4% in November 2012, down from 2.6% in October. A yearearlier the rate was 3.3%. Monthly inflation was -0.1% in November 2012.

Thesefigures come from Eurostat, the statistical office of the European Union.

Inflation inthe EU Member States

InNovember 2012, the lowest annual rates were observed in Greece (0.4%), Sweden(0.8%) and Cyprus (1.4%), and the highest in Hungary (5.3%), Romania(4.4%) and Estonia (3.8%). Compared with October 2012, annual inflationfell in twenty-four Member States, remained stable in one and rose in one.

Thelowest 12-month averages4 up to November 2012 were registered in Sweden (0.9%),Greece (1.2%) and Ireland (1.9%), and the highest in Hungary (5.6%),Estonia (4.3%) and Poland (3.9%).

Euro area

Themain components with the highest annual rates in November 2012 were alcohol& tobacco (3.7%), housing (3.6%) and transport (3.0%), while the lowestannual rates were observed for communications (-4.1%), household equipment andrecreation & culture (both 1.1%). Concerning the detailed sub-indices,fuels for transport (+0.14 percentage points), electricity (+0.10) and gas(+0.08) had the largest upward impacts on the headline rate, while telecommunications(-0.20), cars and financial services (-0.06 each) had the highest downwardimpacts.

Themain components with the highest monthly rates were food and clothing (both0.4%), alcohol & tobacco and household equipment (both 0.1%), while thelowest monthly rates were observed for transport (-1.3%), communications(-0.7%) and hotels & restaurants (-0.6%). In particular, garments and meat(+0.03 each) had the highest upward impacts, while fuels for transport (-0.15),accommodation services (-0.06), air transport and package holidays (-0.03 each)had the largest downward impacts.

Annual inflation (%) in November 2012 in ascending order

Euro area

EU Member States outside the euro area

Measures ofinflation

Anannual rate measures the price change between the current month and thesame month of the previous year. This measure is responsive to recent changesin price levels but can be influenced by one-off effects in either month.

A12-month average rate overcomes this volatility by comparing averageHarmonised Indices of Consumer Prices (HICPs) in the latest 12 months to the averageof the previous 12 months. This measure is less sensitive to transient changesin prices.

Amonthly rate compares price levels between the two latest months.Although up-to-date, it can be affected by seasonal and other effects.

Animpact of a particular component measures the change in the headlineinflation due to the inclusion of that component in the HICP. The impact takesaccount of both the weight and whether the inflation for that component ishigher 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 andthe rate for ‘all-items excluding tobacco’. Impacts are not strictly additive.

HICPs designedfor international comparison

HarmonisedIndices of Consumer Prices (HICPs) are harmonised inflation figures requiredunder the Treaty on the Functioning of the European Union. They are designedfor international comparison of consumer price inflation.

Pricechanges as measured by the HICPs, the Monetary Union Index of Consumer Prices(MUICP), the European Index of Consumer Prices (EICP) and the European EconomicArea Index of Consumer Prices (EEAICP) are used as measures of inflation in theMember States in the European Union, in the euro area, and in the EuropeanEconomic Area.

TheMUICP is used by, among others, the European Central Bank (ECB) as a mainindicator for monetary policy management for the euro area (see ECB pressrelease, 8 May 2003).

TheMember States’ HICPs are supplied by the National Statistical Institutes; theMUICP, EICP and EEAICP are compiled by Eurostat. HICPs are computed as annualchain indices allowing weights to be changed each year. HICP aggregates are calculatedas weighted averages of the HICPs using the weights of the countries and sub-indicesconcerned. The weight of a

country is itsshare of the household final monetary consumption expenditure in the total ofthe country group. For the MUICP this is expressed in euro, for the EICP andthe EEAICP it is expressed in Purchasing Power Standards. The MUICP is treated asa single entity within the EICP and EEAICP starting from 1999.