It’s the end of the month again, and so time for a new inflation record: September inflation was also higher than ever, at 17.1 percent compared to a year ago, report the CBS. In August it was still 13.6 percent. That figure has been determined on the basis of the European harmonized method (HICP), next week the inflation figure of Statistics Netherlands will follow based on the Dutch measurement method (CPI), which also includes housing costs. No doubt, except for a slightly different number, the message will be the same.
And then inflation in the Netherlands is also rising faster than the average in the eurozone (10 percent, according to European statistics company Eurostat). This is partly due to the free gas market in the Netherlands, Frank Notten, economist at CBS, explained earlier to NRC. The gas market is regulated in many other countries, but not in the Netherlands. Although the cabinet will intervene in the derailed market from January next year with the price ceiling.
In addition, the Netherlands is also a major consumer of gas compared to other countries, says Peter Hein van Mulligen, chief economist at Statistics Netherlands. „Houses and other buildings here are mainly heated with gas, while other countries use fuel oil or nuclear energy to use.”
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Energy as a puppeteer
Energy still plays a leading role – “although it is not a monologue”, according to Van Mulligen. “Inflation is also rising rapidly, excluding energy. In the Netherlands, that went from 6.4 percent in August to 7.4 percent in September: a full percentage point more.”
Energy is also the main reason for price increases for other products: companies also have higher energy costs, and they pass these (at least partly) on to the consumer. For example, the energy market may not hold a monologue, but it is the puppeteer who determines what the rest of them say. With the dolls taking on a life of their own: “Even if energy prices stabilize now, current increases may linger, causing other goods to continue to rise in price.”
It sounds like yet another doomsday. And it’s true: the world is getting a little more expensive every month. But the numbers may seem more alarming than they are. Although the figure published by Statistics Netherlands on Friday concerns the European harmonized figure, which makes it easier to compare between the euro countries, there are still small differences between countries in the measurement method. For example, the Netherlands only includes new energy contracts that are twice as expensive as last year. Not all countries do that. Many people still have a fixed energy contract, which means that the impact is relatively small for them.
The question is whether the news consumer will pick up on that nuance. A question that Statistics Netherlands also asks itself: the statistical office is considering using a different measurement method. In normal times this method works fine, says Van Mulligen, because there is not such a big difference between old and new contracts. Which method is best has not yet been decided, but “various calculations are being considered.”
It is not the only question that CBS is mulling over internally. We now receive twice a month a message from Statistics Netherlands: once again the inflation of the past month broke the record. First the European figure, then the Dutch. Is inflation itself subject to inflation? What does that repetition do to people?
On the one hand, ‘the figures are what they are’, says Van Mulligen, and it is the job of the accountants to communicate about them. Previously, this only happened with the national inflation rate (CPI), which governments use for indexation and companies for tariffs, for example. „But a few years ago Eurostat started with the publication of the harmonized figures of euro countries. Then we couldn’t stay behind. That is why we have decided to communicate this to the outside world at the same time.”
That went well for a while, but then inflation started to rise, so that more and more attention was paid to the figures. “And then everyone hears twice a month: it’s the highest inflation ever again.” Statistics Netherlands therefore also sees reason to think about other ways of communication, says Van Mulligen. “We want to choose one moment, but then we have to organize the processes differently. The question is whether and when that is feasible.”
Influence of numbers
For the time being, CBS will continue to report on the two figures at the individual moments. What that does to the news consumer differs per person, says Eva van den Broek, behavioral economist at Utrecht University and who works for Behavioral Insights, a consultancy for companies and governments. On the one hand, the repetition can lead to habituation, which makes people indifferent, on the other hand, it can put people on edge again and again and thus cause stress. “And stress makes people do stupid things.”
At the same time, says Van den Broek, it is a number – and numbers have relatively little influence on people’s behaviour. “It’s abstract, and doesn’t answer a life question like ‘should I buy that bike or not?'” That could also explain the fact that consumer confidence keeps bottoming out, but hasn’t recovered yet. can be seen in people’s consumption behaviour.
Although figures generally have less influence on consumer behaviour, the impact of reporting should not be underestimated. “It is rather the stories of experience, which are also often in the newspaper, that influence people’s behaviour. The hairdresser who goes bankrupt, the family that can no longer pay the energy bill. That fuels uncertainty.”
So it is not only the repetitive nature of the inflation messages that can make people stun or panic, but also what the media does with them. Van den Broek: “Shouldn’t newspapers tell those stories? I don’t know. It may make some people indifferent or stressed, but my secret hope is that it will encourage more people to save energy. Immediately better for the world.”
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