CPI (consumer price index) is the favored indicator in measuring inflation and inflation is on any central bank in the world mandate. A normal mandate in fighting inflation is to keep inflation below or close to two percent and this might seem an easy task, but it is not, as lower level of inflation bring deflation risks, and higher levels of inflation are difficult to control. So keeping a balanced level around the 2% area is the goal of any central bank.
The Core CPI tends to show the change in the price of goods and services purchased by consumers, excluding food, energy, alcohol and tobacco, and it is released by Eurostat. These last goods are considered to be volatile and distort the actual number and this is why they are excluded for the core release.
The most important things to take into consideration when looking at the Core CPI indicator are:
- release date: monthly, about 16 days after the month ends;
- release time: 09:00 GMT, during the London trading session;
- first tier data;
- high volatility expected.