Swiss inflation stays steady in face of US tariffs

Consumer goods rose 0.2% in price from a year ago Keystone / Alexandra Wey

Swiss inflation stayed positive for a third consecutive month, offering reassurance to policymakers as they also evaluate if the economy can weather a jump in United States tariffs.

+Get the most important news from Switzerland in your inbox

Consumer prices rose 0.2% from a year ago in August, matching the increase of the previous month, the country’s statistics office said on Thursday. Most economists in a Bloomberg survey had anticipated inflation to stay at that level or accelerate.

The report marks the final glimpse of price data before the Swiss National Bank’s quarterly decision later this month. Signs of some inflation may lessen pressure on officials to cut interest rates again at a time when the economy is threatened by President Donald Trump’s disproportionately high US tariffs of 39%.

+ Swiss central bank lowers key interest rate to 0%

The reading is strong enough to raise the prospect that price growth in the third quarter may end up exceeding the 0.1% average predicted by the SNB at its last policy decision in June.

Inflation tipped to rise slightly

“At this stage, we do not see any risks of deflationary developments, and our forecasts show a jump in inflation in the coming quarters,” SNB vice-president Antoine Martin said in an interview with L’Agefi published last week.

+ The world’s strongest currency is also super-competitive

A gauge stripping out volatile elements such as energy climbed 0.7%, compared with 0.8% in July.

As in previous years, August proved a pivotal month for the adjustment of rents in Switzerland, helping to push up the overall index — along with clothing and footwear — to offset lower prices for holiday-related activity.

“We see headline inflation rebounding slightly over the coming months, hovering around 0.5%. While price dynamics remain subdued, inflation continues to evolve within the SNB’s 0–2% target band. The impact of a strong Swiss Franc on domestic prices and the hit to growth of higher-than-expected US-tariffs are however key risks for the SNB. We expect the Swiss central bank to cut rates later this year,” said Bloomberg economist Jean Dalbard.

Officials will confront a finely balanced trade-off in coming weeks. They must assess if recent weakening in the franc has been enough to stoke import prices, just as Switzerland’s predicament is further compounded by US tariffs.

Given the trade backdrop, economists at UBS bank last week cut their growth forecast for next year, while manufacturing trade group Swissmem said companies are increasingly considering job cuts and relocating production.

The SNB’s rate is already at zero, further complicating its decision on September 25. Officials have consistently signaled that the bar to reintroducing negative borrowing costs for the first time in three years is higher than for a normal cut. Money-market pricing currently suggests the central bank will keep its policy rate steady well into next year.

Consumer-price growth in the surrounding euro area remains stronger than in Switzerland and came in at 2.1% in August. Based on the European Union’s harmonized measure, the Swiss inflation rate was zero in the period.

©2025 Bloomberg L.P.