HICP classification update refines inflation data
The Harmonised Index of Consumer Prices (HICP), the European Central Bank's main inflation measure, underwent a major classification update in January 2026. This revision aligns with international standards and aims to better delineate goods and services.
A new map for consumer spending
The January 2026 HICP release introduced ECOICOP version 2, a comprehensive update aligning the European classification with the international COICOP 2018 standard.
This reclassification aimed for a clearer separation between goods and services, with delivery fees, repair services, and IT hardware/software now categorized more precisely.
For instance, separately invoiced delivery fees are now a distinct service, and games of chance are included as a new item.
Additionally, the index reference year shifted from 2015 to 2025, and the euro area aggregate now includes Bulgaria following its entry on January 1, 2026.
These changes provide a more accurate representation of evolving consumption patterns and market structures, crucial for effective inflation monitoring.
Headline stability, granular shifts
Despite the extensive reclassification, headline HICP inflation rates remained largely unaffected, with European statisticians opting to keep them unchanged.
Minor differences of up to 0.1 percentage points in the all-items HICP annual rates for the euro area are attributed solely to rounding during the index reference year update.
However, at the sub-component level, recalculations of historical data using the new classification led to some notable changes.
The largest impact was observed in food aggregates, where some chilled and frozen items moved from processed to unprocessed categories, resulting in slightly less volatile unprocessed food inflation.
For other main components like energy, non-energy industrial goods, and services, revisions were minimal, typically ranging between 0.1 and 0.2 percentage points.
Refined tools, consistent signals
The introduction of ECOICOP version 2 is a technical necessity for improving the accuracy and relevance of inflation statistics.
While most underlying inflation measures have been only marginally affected, the significant methodological adjustment to Supercore highlights the ongoing challenge of consistent measurement in a dynamic economy.
Overall, these updates enhance the HICP's ability to identify inflation drivers more easily and capture consumption expenditure shares more accurately, ultimately benefiting inflation monitoring and forecasting.