Headline inflation is the rate of inflation measured across the whole basket of goods and services in a price index, most often the consumer price index. It is the figure usually quoted in the news, expressed as the percentage change in the index over the previous twelve months.
It is contrasted with core inflation, which leaves out items whose prices swing sharply, typically food and energy, to give a clearer view of the underlying trend. A jump in oil prices can push the headline rate well above the core rate for a time, and the gap closes when the price settles. Most central banks define their target in headline terms; under inflation targeting it is commonly 2 per cent. They watch core measures closely when judging how persistent price pressures are and where to set the policy interest rate.