Inflation rate drops again
Inflation has fallen to its lowest level in almost three years, helped by lower energy prices according to figures released on Thursday.
The Federal Statistics Office said consumer price inflation ran at 0.3 per cent in November compared with November, 2000, the lowest rate since February, 1999. In October, the annual inflation increase was 0.6 per cent.
“Swiss inflation is non-existent, and this is unlikely to change anytime soon,” said UBS Warburg economist, Reto Hünerwadel.
The statistics office said energy prices were down 5.2 per cent, while prices for clothing and shoes were up 8.8 per cent.
The figure compares to a European Union rate of 2.5 per cent and is well below the Swiss National Bank’s target of 2.0 per cent.
The low inflation rate gives the SNB further room for interest rates cuts to try to stem the strength of the Swiss franc and give a boost to a slowing economy.
The machinery, electronics and metal-working industry – the country’s biggest export branch – announced this week a 17.4 per cent drop in orders in the third quarter. It blamed the franc’s strength for much of the decline and warned of major job losses.
The SNB’s next move on interest rates isn’t expected to come until December 7, when it is due to state its monetary target for the next quarter.
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