Inflation rate at 14.3 percent in October

CBS also calculates monthly average price developments if energy and motor fuel prices are not taken into account. Excluding energy and motor fuels, inflation would have increased from 6.5 percent in September to 6.9 percent in October.

Inflation is measured each month as the increase in the consumer price index (CPI) relative to the same month in the previous year. The consumer price index shows the price development of a package of goods and services as purchased on average by Dutch households. An inflation of 14.3 percent in October 2022 means that consumer product prices were 14.3 percent higher than in October 2021. This means the 14.3-percent inflation in October was not on top of the 14.5-percent inflation in September.

Smaller increase in energy prices

Prices of energy (electricity, gas and district heating) in October had a downward effect on inflation. In October, energy was 173 percent more expensive than one year previously. In September, the year-on-year increase amounted to 200 percent.

Study on energy prices progressing

Energy currently makes a significant contribution to overall inflation. The price development of energy is measured by CBS on the basis of new energy contracts. However, there are also households that have a fixed contract for gas and electricity. CBS is studying a new method for the measurement and calculation of energy prices as part of the CPI, in which current energy price developments will be presented in a more refined manner. So far, the first provisional calculations have now been carried out and the preliminary research results were published at the end of October. For its research, CBS uses data files provided by energy companies.

In the coming period, CBS will provide regular updates and results from the study along with its reports on inflation. The study is expected to be well advanced by January. More clarity will then be provided about which observation method of energy prices will be implemented, and the date when this new method will be implemented. Figures already published will not be adjusted during the transition towards a new method.

Downward effect of motor fuels

The price development of motor fuels had a downward effect on the inflation rate. In October, the price increase amounted to 7.5 percent year on year, against 11.4 percent in September.

Food and clothing more expensive

Prices of food increased further in October. Food was 14.0 percent more expensive than in October 2021. In September, the year-on-year increase was 12.8 percent. Clothing had also an upward effect on inflation as well. Prices of clothing were 9.4 percent up year on year in October; in September, the increase was 8.0 percent.

Euro area inflation rate continues to rise

Since 1996, CBS has published two different inflation rates: one based on the Consumer Price Index (CPI) and one based on the Harmonised Index of Consumer Prices (HICP). According to the European HICP, consumer goods and services in the Netherlands were 16.8 percent more expensive in October than in the same month last year, down from 17.1 percent in September. Inflation in the euro area rose from 9.9 percent in September to 10.7 percent in October.

Difference between CPI and HICP

In order to facilitate comparison between countries, EU member states calculate a consumer price index according to internationally agreed definitions and methods. The European Central Bank (ECB) uses the HICP to formulate its monetary policies in the euro area. In addition, most countries produce their own national consumer price index.

The main conceptual difference between the CPI and the HICP for the Netherlands is that, unlike the CPI, the HICP does not take into account the costs related to home ownership. In the Dutch CPI, these costs are calculated based on developments in rental property prices.

Initial estimate of inflation according to CPI

CBS has been publishing an estimate of inflation according to the HICP for some time. On 6 January 2023, CBS will publish both flash estimates: one according to the CPI and the usual flash estimate according to the HICP. Both contain provisional figures, based on as yet incomplete source data. The estimated figures for the CPI and the HICP are published at the all-items level and a limited number of special aggregates. The regular figures will be published a few working days after this estimate.

Implications of the coronavirus crisis for consumer price measurements

Due to the government's COVID-19 countermeasures, several services were either limited or unavailable as of March 2020. As a result, there were no transactions that allowed for price measurements for some of the services. In accordance with Eurostat guidelines, CBS opted for the most appropriate estimation method in each situation. Price estimates for October 2022 are no longer related to COVID-19, but estimates made for the same month last year do still affect this month's inflation rate.