It is rare for inflation to rise so rapidly. Over the past 15 years, it only occurred once.
Higher motor fuel prices drive inflation up
Motor fuel prices pushed up inflation in January. The consumer price for a litre of petrol at the filling station was 1.57 euros, i.e. 14 eurocents more than in January 2016. The average price of diesel fuel was 1.25 euros, 20 eurocents above the level in January 2016. The price of electricity also contributed to inflation. Levies were raised by 33.7 percent, whereas one year ago they declined by 55.6 percent.
Airline ticket prices and prices for holiday park accommodations were also up from January 2016. Last year’s Christmas holiday ended on 2 January, whereas this year’s Christmas holiday continued into the first week of January. As prices tend to be higher during holiday periods, there were more days with high prices in January 2017. This also had an upward effect on inflation.
Increase inflation excluding energy, food, alcohol and tobacco
Energy and food prices vary significantly and alcohol and tobacco prices are frequently raised as a result of higher excise duties. Therefore, inflation is also measured excluding these product groups. According to this criterion, the rate was 1.4 percent in January, versus 0.9 percent in December.
Inflation rate up in the Netherlands and the eurozone
In addition to the consumer price index (CPI), CBS also calculates the European harmonised price index (HICP).
The HICP-based rate of inflation in the Netherlands increased from 0.7 percent in December to 1.6 percent in January. The eurozone rate went up from 1.1 percent to 1.8 percent over the same period. Hence, the gap between the Dutch rate and the eurozone rate is narrowing. Higher energy and food prices are the main cause for the higher inflation rate in the eurozone.
The Harmonised Index of Consumer Prices (HICP) is compiled according to the European harmonised method in order to facilitate comparison between the various EU member states. Price indices for the eurozone and the European Union as a whole are calculated on the basis of the HICPs of the separate member states. The European Central Bank (ECB) uses these figures to formulate its monetary policy. According to the ECB, prices are stable, if the inflation rate is close to 2 percent.
Unlike the CPI, the HICP does not take into account the costs related to home ownership. In the Dutch CPI, these costs are calculated on the basis of rent levels.