Swiss Inflation Quickens to 2-Year High Driven by Oil, Franc
(Bloomberg) — Switzerland’s inflation rate rose to the highest level in two years as stronger oil prices and a weaker franc fanned price pressures that still appear feeble compared to the rest of Europe.
Consumer prices increased 1% from a year earlier in September, the statistics office said on Thursday. That matches the median estimate in a Bloomberg survey of economists and is above August’s 0.8% figure.
The reading is in line with the Swiss National Bank’s forecast for the quarter and comfortably in the 0-2% range that policymakers target. Officials see most of the acceleration as temporary and have said that medium-term pressures increased only slightly.
SNB borrowing costs have been at the world’s lowest level of zero for more than a year, in part because the cost shock from the Iran war has been benign in Switzerland. Petrol prices rose, but a smaller share of energy in the Swiss inflation basket has kept that from driving the gauge.
In September, higher costs for petroleum products were dampened by slightly lower ones for clothing and footwear, the statistics office said. So-called core inflation, which excludes volatile elements such as energy, ticked up to 0.5% from 0.4%, the second increase in a row.
The data contrast with the surrounding euro area, where the fallout from the Iran war probably drove price growth to a three-year high last month. Following the harmonized European methodology, Swiss inflation in September was 1.2%. That compares to an expected 3.7% in the currency bloc.
The Swiss pickup is driven by higher prices of imported goods, according to Bank J Safra Sarasin Chief Economist Karsten Junius. Still, he cautioned in a note that also domestic wares are “steadily becoming more expensive.”
What Bloomberg Economics Says…
“Looking ahead, under our baseline scenario for oil and gas prices, we expect Swiss inflation to rise gradually over the rest of 2026 and peak at around 1.4% in December. Higher energy costs will feed through to the index, while a weaker franc supports import price inflation. We expect inflation to ease in 2027 as higher energy prices drop out of the annual comparison.”
—Jean Dalbard, economist. For full React, click here
Over the past months, a continued weakening of the franc has boosted domestic cost increases, as buying abroad became pricier for the Swiss. Policymakers acknowledged this at their rate decision last week by dialing down their threat of intervention after some action to weaken the currency.
SNB watchers interpreted that as a pivot toward a more attentive stance on prices.
People familiar with the thinking inside the SNB told Bloomberg in July that officials expected at the time to keep rates at zero until the end of next year.
That’s still in line with what most economists expect and the median forecast in a Bloomberg survey predicts a first hike will only materialize in early 2028. But there’s a growing divide among analysts and some see such a move as early as December, a step that would align the SNB with peers in Frankfurt and Washington.
“With today’s data a December rate hike didn’t become more likely but the case for higher rates in 2027 does,” Junius said.
Policymakers will also weigh mixed signals on the performance of the Swiss economy. After exceptional growth in the second quarter and some signs for continued strength, Swiss manufacturing unexpectedly contracted in September.
–With assistance from Kristian Siedenburg, Joel Rinneby and Harumi Ichikura.
(Updates with PMI, economists starting in seventh paragraph.)
©2026 Bloomberg L.P.
