what is the harmonized index of consumer prices hicp 
the harmonized index of consumer prices hicp is a measure of inflation in the european union eu it reflects change over time in the prices paid by households for a representative basket of goods and services 1 the european central bank ecb uses the hicp for the eurozone comprising the 19 eu states using the euro common currency to pursue its objective of price stability defined as 2 annualized inflation over the medium term 2understanding the harmonized index of consumer prices hicp each eu state s statistical agency compiles a national hicp using a common methodology eurostat a department of the european commission then uses the national hicps to calculate the monetary union index of consumer prices muicp the aggregate hicp for the 19 country eurozone area that serves as the ecb s primary inflation gauge eurostat also calculates the european index of consumer prices eicp covering the entire european union as well as the european economic area index of consumer prices incorporating data from eu trading partners norway iceland and liechtenstein 3the flash estimate of the eurozone s muicp published by eurostat on the last working day of each month is a key economic release for financial markets 1each country s hicp measures the change over time in the prices of a basket of goods and services reflective of the spending patterns of that country s households the index tracks the prices of goods such as coffee tobacco meat fruit household appliances cars pharmaceuticals electricity clothing and many other widely used products and services 4 owner occupied housing costs are excluded from the hicp though the ecb s governing council recommended their inclusion in 2021 52weighted basketseurostat calculates the monetary union index of consumer prices using the weighted average of the hicp from each country in the euro area based on the country s share of aggregate eurozone consumer spending each country s hicp measures the change over time in the prices of a basket of goods and services representative spending by that country s households the baskets of consumer goods and services and the weightings of each country are updated annually to reflect the most recent spending patterns 6the muicp was first compiled in 1998 ahead of the euro currency s launch on jan 1 1999 78