HICP — Frequent out-of-pocket purchases

This article introduces a new special aggregate in the framework of the harmonized index of consumer prices (HICP) which comprises 'frequent out-of-pocket purchases' (FROOPP) and its complement – 'less frequently or non-out-of-pocket purchased' (non-FROOPP) items. The price development for these two aggregates has differed notably from the overall price development at the EU level over the past 11 years. Price increases for FROOPP have generally been higher than the headline inflation figure, while increases for non-FROOPP have been below that rate. These differences were much higher from autumn 2007 to autumn 2008 when relatively high inflation rates were seen across the European Union and prices for many everyday products rose by rates which had not been seen for more than a decade. However, during the most recent months, inflation has fallen sharply to much lower levels, in large part due to falling energy and fuel prices. The result of this is that for December 2008 and January 2009 the price increase for FROOPP was lower than the headline inflation rate.