Swiss Consumer Prices Accelerate to 1.5%, Strongest Since Late 2023

what happened

Swiss annual inflation climbed to 1.5% in October from 1.0% a month earlier, its highest reading since December 2023, according to Dow Jones Newswires. The rise was driven by costlier imported energy, as uncertainty over the war in the Middle East kept fuel prices elevated.

Prices of imported goods rose 3.7% year on year, up from 2.1% in September, while energy and fuel costs were 16% higher after a 12% gain. Inflation returned to a level above the midpoint of the Swiss National Bank's 0%-2% target band for the first time since August 2024. Core inflation, which excludes energy and fresh food, held steady at 0.5%.

The franc strengthened against the euro after the release. Investors expect the SNB to keep its key rate at 0% well into next year, unlike several central banks that have lifted rates recently. Pantheon Macroeconomics thinks the SNB could move above zero, while Capital Economics sees underlying price pressure as still weak.

why it matters

For markets, firmer inflation combined with a steady SNB keeps the franc in focus. A stronger currency makes imports cheaper but weighs on Swiss exporters. Economists see Switzerland as less exposed to energy shocks thanks to its hydro and nuclear generation.

market impact

EUR/CHF and the franc: firmer inflation and talk of a possible SNB hike support the franc

• ▼EUR/CHF pressure down — the franc gained after the inflation data as investors sought safe-haven currency demand

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