Swiss inflation hits two-year high of 1%
TLT•Swiss annual inflation rose to 1.0% in September from 0.8% in August, its highest rate in just over two years. Monthly prices were unchanged, while the Swiss National Bank kept its benchmark rate at zero.
1. Inflation accelerates
Annual inflation in Switzerland reached 1.0% in September, its highest rate in just over two years. Prices were unchanged from August, matching forecasts. Higher prices for heating oil, petrol and diesel were offset by lower prices for package holidays, car rentals and hotels.
2. Rate outlook
The inflation increase followed the Swiss National Bank’s decision to hold its benchmark rate at zero. Economist GianLuigi Mandruzzato said domestic prices may reflect more of the energy price shock and higher import costs, while the franc’s recent depreciation could keep inflation elevated for longer than forecast unless the bank adopts a less accommodative stance. Economist Karsten Junius said the acceleration means the SNB is moving closer to a rate hike next year. The SNB targets inflation of 0% to 2%.
