Inflation rate further up

The Dutch inflation rate was 3.0 percent in January. In November and December 2012, inflation stood at 2.8 and 2.9 percent respectively. Inflation is defined as the increase in the consumer price index (CPI) in a particular month compared to the same month in the previous year.

The rise in inflation in January was mainly caused by price developments of insurance products and new cars. These prices rose as a result of tax measures. Petrol prices and prices of holiday trips abroad had a downward effect on inflation.

The harmonised consumer price index (HICP) allows comparison between the inflation rates in the various member states of the European Union (EU). The level of inflation in the eurozone is one of the main guidelines for the European Central Bank (ECB) to change or refrain from changing the interest rate. According to the ECB, prices in the eurozone are stable, if the inflation rate is close to 2 percent.

According to the HICP method, the Dutch inflation rate was 3.2 percent in January against 3.4 percent in December. Eurostat, the European statistical office, calculated an inflation rate of 2.0 percent for the eurozone, also 0.2 percentage points down from December. The huge gap between the rate in the Netherlands and the eurozone rate can partly be attributed to the VAT increase from 19 to 21 percent introduced in the Netherlands on 1 October 2012.

Dutch inflation rate