Core inflation is the HICP with the most volatile components — energy, food, alcohol and tobacco — removed. The aim is to see the underlying trend without the noise of swinging oil and food prices.
Why look at core
Headline inflation can spike or drop sharply on energy prices alone, which can mislead about the underlying picture.
Core moves more slowly and is a better guide to whether inflation is becoming embedded in wages and services.
Central banks watch core closely when deciding whether a burst of inflation is temporary or persistent.
When headline inflation falls but core stays high, it usually means the original shock has faded but price pressure has spread through the wider economy.
Source: Eurostat and ECB (HICP excluding energy, food, alcohol and tobacco).