These could, in the long run, pose a threat to price stability. 2.3 Measuring inflation However, we should also think about whether our target variable, the rate of inﬂation, is currently being measured correctly. Monetary policy is based on the Harmonised Index of Consumer Prices ( HICP) for the euro area.
In principle, it best meets the requirements of a measure for price stability within the euro area, in terms, for instance, of the breadth of the data collected and comparability within Europe. The HICP also contains rents. However, a lot of people own their own ﬂats or houses. Yet owneroccupied housing is absent from the HICP basket of goods.