|Jean-Claude Trichet, president of the European Central Bank, at a press conference at the end of an emergency Eurozone summit, Brussels, July 21, 2011. |
Eurozone annual inflation is
expected to be 2.5% in July 2011 according to a flash estimate issued by
Eurostat, the statistics office of the European Union. It was 2.7% in June.
The target inflation rate of the
European Central Bank is "below but close to" 2% and earlier this
month, the Bank raised its benchmark interest rate to 1.50% from 1.25%.
Computation of flash estimates: Eurozone inflation is
measured by the Monetary Union Index of Consumer Prices (MUICP). To compute the
MUICP flash estimates, Eurostat uses early price information relating to the
reference month from member Ssates for which data are available4 as well as
early information about energy prices.
The flash estimation procedure for the MUICP combines historical information
with partial information on price developments in the most recent months to give
a total index for the Eurozone. No detailed breakdown is available. Experience
has shown the procedure to be reliable (19 times exactly anticipating the
inflation rate and 5 times differing by 0.1 over the last two years).
The member tates participating in the Eurozone are Belgium, Germany, Estonia,
Ireland, Greece, Spain, France, Italy, Cyprus, Luxembourg, Malta, the
Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland.