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The inflation rate, also known as the price increase rate, provides information about how high or low inflation currently is.
To determine the inflation rate, all goods and services that are consumed or used by private households are used. The European Central Bank (ECB) describes this as follows: “To calculate inflation, a fictitious basket of goods is put together. This shopping basket contains all goods and services that private households consume or use during a year. Each product in this shopping cart has a price. This can change over time. The annual inflation rate is the price of the entire basket of goods in a given month compared to the price of the basket of goods in the same month the previous year.”