Euro Area Inflation Gauge Gets a Makeover as ECB Watches the Numbers

Europe’s official inflation yardstick is about to change—just as policymakers are pointing to it as proof that price growth is back under control.

On Feb. 4, Eurostat will publish the latest euro-area inflation reading under a new “rulebook” that reshapes how items from streaming subscriptions to delivery fees—and, for the first time, gambling—are classified in the Harmonised Index of Consumer Prices (HICP).

The technical overhaul has been years in the making. Its arrival follows recent data showing inflation close to the European Central Bank’s (ECB) target. A flash estimate on Jan. 7 put annual inflation at 2.0% in December, before the final figure was revised to 1.9% on Jan. 19.

A new map of household spending

The change centers on the HICP, the benchmark used to compare inflation across the European Union and the key reference for ECB interest-rate decisions. Starting with the January 2026 reference month—first published on Feb. 4—the HICP will be compiled using a revised classification of household spending known as ECOICOP version 2, aligned with the United Nations’ 2018 update to the international COICOP standard.

Eurostat says the earlier structure, rooted in a 1990s-era framework, no longer reflected how households spend in economies shaped by digital services, subscription models, and hybrid products.

Under the new setup, the index draws clearer lines between goods and services and creates new subclasses for activities such as repair, maintenance, installation and rental. Categories are reworked to better capture bundled telecom contracts, digital services, and modern recreation and culture consumption such as streaming and online content.

Transport is also adjusted to explicitly include “transport of goods”—such as delivery fees—which were previously more often embedded in the prices of the goods themselves. A new Division 13 is added to cover personal care, social protection and miscellaneous goods and services.

The changes are mandated by Commission Delegated Regulation (EU) 2024/3159, amending the HICP legal framework under Regulation (EU) 2016/792. An accompanying implementing regulation, (EU) 2024/1720, sets out how national statistical offices should link the old and new series and when they may adjust for level shifts stemming from major methodological changes.

Gambling enters the inflation basket

One of the most visible changes is the inclusion of “games of chance”—gambling—in the index for the first time. From January 2026, it will be included under recreation services within the broader recreation, sport and culture category.

Eurostat says the shift follows recommendations published in December 2024 on how to measure gambling in price statistics. It estimates that the weight of games of chance in national consumption baskets ranges from about 0.2% to 3.5% across EU member states.

Even so, the statistical office expects little impact on the headline figure. “No significant impact on the all-items HICP is expected,” Eurostat said, adding that a fuller impact analysis is planned once a full year of data under the new system is available.

Rebasing without moving the goalposts

Alongside the reclassification, Eurostat is updating the index reference period from 2015 = 100 to 2025 = 100. Rebasing is a routine rescaling exercise intended to keep index levels readable. Eurostat says inflation rates—percentage changes over time—should not change except for minor rounding differences.

To limit disruption for wage deals, rents, and other index-linked contracts, Eurostat says the all-items HICP will remain the same “up to the second decimal” for any month, country, or European aggregate. For the euro area overall, it describes the impact on headline inflation as “practically negligible,” visible only at the third decimal place.

Eurostat has compiled historical HICP data in the new ECOICOP structure for every month from 1996 onward, supporting continuity for analysts and institutions.

The ECB’s key benchmark

For the ECB, the HICP is not just another statistic: it is the metric on which the central bank’s policy objective is defined.

“Our main objective is to keep prices stable. To achieve this, we aim for 2% inflation over the medium term,” the ECB says. “Our reference for measuring inflation is the Harmonised Index of Consumer Prices (HICP).”

After raising rates sharply to counter the 2022–2023 inflation surge, the ECB began cutting borrowing costs in 2024 and 2025 as pressures eased, shifting toward a more cautious, data-dependent stance.

Recent data show headline inflation near target, but with large cross-country variation. The 1.9% euro-area reading for December 2025 ranged from 0.1% in Cyprus and 0.7% in France to 8.6% in Romania. Services contributed 1.54 percentage points to the euro-area rate, food, alcohol and tobacco 0.49 points, non-energy industrial goods 0.09 points, while energy subtracted 0.18 points.

From Feb. 4, when the January 2026 flash HICP is published, those aggregates will be compiled under the new classification. On the same day, the ECB plans to discontinue its current “Indices of Consumer Prices – ICP” dataset and replace it with a new HICP dataset aligned with Eurostat’s revisions.

Small methodological shifts, big analytical implications

Eurostat’s estimates suggest that, for European aggregates, the new system’s impact on the four main sub-components tracked closely by the ECB—food, energy, non-energy industrial goods and services—is modest. For data from 2018 to 2024, differences range roughly from +0.05 to −0.12 percentage points, with non-energy industrial goods showing the largest shifts.

Those changes may be small at the headline level, but they can matter for economists and market participants who rely on detailed inflation breakdowns to assess underlying trends. Forecasting models and pricing for inflation-linked assets can be sensitive to how specific components behave, not just the overall figure.

At the national level, some countries are pairing the ECOICOP v2 switchover with broader upgrades to data sources and quality controls. Estonia, Ireland and the Netherlands are among those introducing changes that may create more visible jumps in their indices around January 2026. Under EU implementing rules, national statistical offices may apply level-shift adjustments when a new method leads to a permanent and significant change in index levels, subject to defined conditions.

Eurostat has acknowledged the possibility of “potential breaks in the HICP data for January 2026” due to changes and linking methods, stressing that such breaks should be documented and limited where possible.

A test of trust in the numbers

The overhaul underscores the need for statistical systems to adapt as economies evolve—and highlights the communication challenge for institutions whose credibility rests on public trust.

After the sharp inflation spike of 2022 and 2023, official price measures have drawn increased scrutiny from households, unions and politicians. Changes to the measurement system can be framed, particularly in domestic debates, as attempts to mask cost-of-living pressures or smooth the path for interest-rate decisions.

Eurostat has sought to head off such interpretations by flagging the updates in late-2025 releases and publishing technical documentation. The ECB, for its part, is presenting the revision as a modernization that better reflects consumer behavior—without shifting the 2% “goalposts.”

When the January 2026 estimate appears on Feb. 4, most consumers may not notice what has changed behind the headline number. For central bankers, markets and statisticians, however, the release will open a new chapter in how Europe measures the price stability underpinning its currency and much of its economic policy.