• Definition: The HICP measures the change over time in the prices of consumer goods and services acquired, used, or paid for by households.
• Purpose: It is used by the European Central Bank (ECB) to define and monitor price stability (aiming for below 2% over the medium term) and to assess inflation convergence for countries joining the Euro.
• Coverage: It covers the "household final monetary consumption expenditure" including goods and services (food, clothing, health, transport, telecommunications, etc.).

Data Model: In the CMDportal Collaborative Bond and Money Market Data Model, HICP is used as a reference indicator supporting inflation-linked securities and coupon type attributes.

Effects on bond and money markets:

• HICP inflation data influences ECB interest-rate expectations, directly affecting government bond yields and short-term money-market rates.

• Higher HICP readings typically lead to rising yields and lower bond prices, while supporting demand for inflation-linked securities.

• HICP releases act as key market signals for pricing, liquidity conditions, and yield-curve positioning across fixed-income markets.

Regulatory and market-structure implications:

• HICP serves as the primary inflation benchmark for ECB monetary policy, shaping regulated funding and benchmark interest rates.

• Supports risk modelling, valuation, and regulatory reporting across EU bond and money-market participants.

• Harmonised methodology enables cross-border comparability and ESG/Green EU classification within market data frameworks such as CMDportal.