Eurostat, the Statistical Office of the European Communities, has released figures on inflation within the Euro area for April 2008.

Euro area annual inflation was 3.3% in April 2008, down from 3.6% in March. A year earlier the rate was 1.9%. Monthly inflation was 0.3% in April 2008 and EU annual inflation was 3.6% in April 2008, down from 3.8% in March. A year earlier the rate was 2.2%. Monthly inflation was 0.4% in April 2008.

In April 2008, the lowest annual rates were observed in the Netherlands (1.7%), Portugal (2.5%) and Germany (2.6%), and the highest in Latvia (17.4%), Bulgaria (13.4%) and Lithuania (11.9%). Compared with March 2008, annual inflation rose in eight Member States, remained stable in four and fell in fifteen.

The lowest 12-month averages up to April 2008 were registered in the Netherlands (1.7%), Malta (1.9%), Denmark, Sweden and the United Kingdom (2.2% each), and the highest in Latvia (13.0%), Bulgaria (10.1%) and Estonia (8.8%)

The highest monthly and annual rates were observered within:

• Clothing
• Housing
• Food

The lowest monthly and annual rates were possessed by communications.

Measures of inflation

The annual rate measures the price change between the current month and the same month of the previous year. This measure is responsive to recent changes in price levels but can be influenced by one-off effects in either month. The 12-month average rate4 overcomes this volatility by comparing average Harmonized Indices of Consumer Prices (HICPs) in the latest 12 months to the average of the previous 12 months. This measure is less sensitive to transient changes in prices. The monthly rate compares price levels between the two latest months. Although up-to-date, it can be affected by seasonal and other effects.