Core inflation
Inflation excluding volatile items, usually food and energy. Definitions vary by country.
In plain words
Core inflation strips out food and energy prices, which swing wildly month to month due to harvests, oil markets, and geopolitics. What remains is a smoother signal of underlying price pressure — the inflation central banks watch most closely.
Frequently asked questions
Why do central banks focus on core rather than headline inflation?
Core inflation removes food and energy, which are volatile and influenced by supply shocks outside a central bank's control. The underlying trend in core inflation better reflects the sustained price pressures that monetary policy can actually address.
Is core inflation the same everywhere?
No. The US typically excludes food and energy. The UK and ECB use a slightly different definition. Some countries also produce a "supercore" that excludes more volatile services. Always check which definition is being quoted.