Switzerland’s Inflation Picks Up for First Time in Five Months

(Bloomberg) — Swiss inflation ticked up last month for the first time since July, easing pressure on the Swiss National Bank to reintroduce negative interest rates.

Consumer prices rose 0.1% from a year earlier, the statistics office said on Thursday. That’s up from zero in November and matches the median estimate in a Bloomberg survey of economists.

The result means that fourth-quarter inflation will be in line with the SNB’s 0.1% forecast. That outlook was lowered slightly last month, when policymakers led by President Martin Schlegel justified their decision to avoid cutting the key rate from zero with the prospect that consumer-price growth will advance.

Rising costs for rent, education and tobacco products were among the contributors to the year-on-year acceleration. A measure for underlying price growth quickened to 0.5%.

The 2025 inflation rate came in at 0.2%, officials said. That’s the weakest outcome since the first year of the Covid pandemic.

Looking ahead, Switzerland is still likely to face subdued inflation in January, as electricity prices — which were lowered by around 4% throughout the country with the new year — are set to weigh on the gauge. Additionally, companies anticipate wage increases to slow.

In December, the SNB cut its forecast for consumer price increases to 0.3% for this year, down from 0.5%. In the first quarter, the central bank sees it averaging 0.1%.

Those projections may be threatened by a slowdown in economic activity after data earlier this week showed that manufacturing unexpectedly fell to a seven-month low. That casts doubt on stronger growth estimates after a trade deal with the US.

Inflation in the surrounding euro area remains much higher than in Switzerland. Based on the European Union’s harmonized measure, the Swiss inflation rate was 0.2% in December.

–With assistance from Joel Rinneby, Harumi Ichikura and Kristian Siedenburg.

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