Swiss Inflation Slows to Four-Month Low as SNB Seen on Hold

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Or sign-in if you have an account.v5(arr8o])ay9[wqe[sedfvz_media_dl_1.png Swiss Federal Statistical Office(Bloomberg) — Swiss inflation slowed to a four-month low, resisting the impact of energy prices that have fanned surging costs across Europe.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountConsumer prices rose 0.4% in July from a year earlier. That’s down from 0.5% in June and matches the median economist estimate in a Bloomberg survey.Higher costs for diesel and heating oil were offset by a range of cheaper goods and services from clothing to car rentals, Switzerland’s statistics office said. So-called core inflation, which excludes volatile elements such energy, held at 0.3%.Monday’s reading contrasts with a mild, temporary acceleration predicted by the Swiss National Bank. With interest rates at zero, the central bank expects the quarterly average to peak at 0.8% by early next year, comfortably within its targeted range of 0-2%. Officials have stressed that medium-term pressures are essentially unchanged.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againJuly saw the franc weaken and oil prices rise, two factors that typically fan Swiss inflation. The reading highlights how benign the energy shock has been in Switzerland compared with neighbors such as the euro area, where price growth is much faster.Based on weak inflation dynamics, people familiar with the thinking inside the SNB told Bloomberg that in the absence of shocks, borrowing costs are currently expected to stay at zero until the end of next year. Then they will probably rise, the people said.Publicly, policymakers have stressed that if necessary, they have an “increased willingness” to sell the franc in order to prevent an excessive appreciation of the traditional haven currency. That likely contributed to the recently softer franc.The SNB has apparently followed through on that rhetoric by purchasing foreign currencies worth 3.9 billion francs ($4.8 billion) in the first quarter. Second-quarter data are due at the end of September.Following the euro area’s harmonized methodology, the Swiss inflation rate in July was 0.7%. That compares with 2.9% in the currency zone that surrounds the country.—With assistance from Harumi Ichikura, Joel Rinneby and Kristian Siedenburg.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.