€-inflation details – Insurances only slightly more expensive

Details confirm core rate close to ECB target

According to the final figures from Eurostat and the ECB, consumer prices in the euro area excluding energy, food, alcohol and tobacco (core rate) rose by a seasonally adjusted 0.18% in January compared to December. As in the previous quarter, the core rate is therefore close to the value that would be compatible with the ECB target of 2% year-on-year. Observers had assumed that special effects such as rising insurance premiums would drive the core rate significantly higher in January. However, this has largely not been confirmed and the necessary correction for volatile services is therefore only minor. The differences between the ECB's and our seasonal adjustment procedure compensate for this almost completely. We will go into the details in the following sections.

Slight deviations in the seasonal adjustment procedures

The ECB's seasonal adjustment method may have slightly underestimated the previous month's core rate in the last few months. If the previous month's core rate is adjusted using our preferred method (X-13 ARIMA model) instead, which has been less susceptible to fluctuations in recent months, the core rate in January would be 0.22%.

For full text see attached PDF-Version.