European Union Inflation Rate

Understanding Inflation Rate — a simple guide

What it measures

The year-on-year change in the consumer price index (CPI) — the cost of a representative basket of goods and services bought by households.

How it is calculated

The statistics office tracks the prices of a fixed “basket” of goods and services that a typical household buys — food, fuel, rent, clothes, transport, education and more. The inflation rate is the percentage change in the price of this basket compared with the same month a year earlier.

Why it matters for the economy and markets

Inflation erodes purchasing power and is the primary target of most central banks. Persistent inflation above target usually leads to higher policy rates; low inflation gives room for easing.

How to read it

Many central banks target around 2% (India targets 4% within a 2–6% band). Monthly data shows turning points earlier than annual averages; base effects from the previous year can make the year-on-year figure swing.

What to look at alongside it

Core inflation (without food and fuel), the policy interest rate, wage growth and oil prices.

Key terms

CPI

Consumer Price Index — the index used to measure household inflation.

YoY

Year-on-year: compared with the same period one year earlier.

Deflation

A sustained fall in the general price level (negative inflation).

Core inflation

Inflation excluding volatile items like food and energy.

Data source

OECD — Organisation for Economic Co-operation and Development (series OECD CPI YoY), monthly data from Dec 2000 to Dec 2025. Values are shown exactly as published by the source and may be revised later.

How to use the chart

Use the 5Y / 10Y / 25Y / Max buttons to change the time range, or drag the slider under the chart. Hover (or tap) on the line to see the exact value for any period. Dashed lines and hatched bars are IMF projections, not actual data. The “Download CSV” button gives you the full data series.