Swiss Inflation Falls to Lowest Rate in Three Years in Encouraging Sign for Central Bank

By Ed Frankl

Swiss inflation edged down in September to its lowest annual rate since August 2021, a reassurance for policymakers at the country's central bank, which last month cut its key interest rate for a third meeting in succession.

Consumer prices were 0.8% higher than the same time last year, falling from 1.1% in August, and well below the 2% upper limit of the Swiss National Bank's target range, according to data from Switzerland's Federal Statistical Office released Thursday.

Annual core inflation, which excludes volatile energy and fresh food prices, was higher than the headline rate, at 1.0%, indicating that some underlying pressures remain.

Meanwhile, overall consumer prices fell by 0.3% in September from the prior month, driven by lower prices for international package holidays, accommodation and air transport, according to the data.

The central bank in late September cut its key rate to 1% from 1.25%, and said annual inflation would average at 0.6% in 2025. Further rate cuts might become necessary, it added, with policymakers wary of allowing the Swiss franc to appreciate too much against the euro currency, which would weaken the country's exports to its neighboring market.

Write to Ed Frankl at edward.frankl@wsj.com

(END) Dow Jones Newswires

October 03, 2024 03:07 ET (07:07 GMT)

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