(1)

Regulation (EU) 2016/792 lays down a common framework for the production of the harmonised index of consumer prices (HICP), the harmonised index of consumer prices at constant tax rates (HICP-CT), the owner-occupied housing price index and the house price index.

(2)

Significantly changing the HICP and HICP-CT production methods may result in a permanent and significant shift, upwards or downwards, in the level of the index. This would in turn result in distorted annual rates of change for 1 year after the change is made. To ensure unbiased rates of change, it may be necessary to adjust the level of the index. Such an adjustment should be derived from observed prices.

(3)

To ensure that the harmonised indices are comparable, uniform conditions are needed for the use of adjustments in the compilation of the HICP and the HICP-CT in the case of significant changes in production methods.

(4)

The measures set out in this Regulation are in accordance with the opinion of the European Statistical System Committee,

(1)

in Article 2, the following points (34) and (35) are added:

‘(34)

“Level-shift factor” means a factor determined by the ratio between the price changes obtained using current and new production methods, whereby the price change is measured from a calendar year to the price reference period, respectively: The chained index in December of year , using the current production method, is denoted by . The annual average of this index in any calendar year y before the current year t is denoted by ChI y . Similarly, the chained indices, using the new production method, are denoted by ChI New . The indices ChI and ChI New can have different index reference periods.

(35)

“Level-shift adjustment” means multiplying the index using the new production method in the HICP and the HICP-CT, having December of year as the price reference period, with a respective level-shift factor, starting from the first month when the new production method is introduced until the end of the calendar year’;

(2)

in Chapter 2, the following Article 22 is added: