Finance
Surprise Swiss inflation dip not enough to warrant central bank action, analysts say
Published by Global Banking and Finance Review
Posted on November 3, 2025
2 min readLast updated: January 21, 2026
Home > Finance > Surprise Swiss inflation dip not enough to warrant central bank action, analysts say
Quick Summary
Swiss inflation unexpectedly dipped in October, but analysts believe it's insufficient for central bank action. Prices rose by 0.1% year-on-year, missing forecasts.
Surprise Swiss inflation dip not enough to warrant central bank action, analy...
Swiss Inflation Trends and Central Bank Response
ZURICH (Reuters) -Inflation in Switzerland fell unexpectedly in October, government data showed on Monday, although not enough to make the central bank consider interest rate cuts, analysts said.
Current Inflation Data
Prices rose by 0.1% last month compared with a year earlier, according to figures from the Federal Statistical [Statistics?]Office, down from a 0.2% rate in September.
Market Reactions and Predictions
The figure missed forecasts for a 0.3% rise in a Reuters poll, as food and clothing became cheaper.
Impact of Currency Strength
The inflation figure was towards the bottom of the Swiss National Bank's targeted 0-2% range. The central bank declined to comment on Monday.
Future Inflation Risks
Month-on-month Swiss prices fell by 0.3% in October, compared with September, due to cheaper prices for international packaged holidays and hotels, while private transport costs also fell.
Still, the slackening will not be enough to make the SNB cut interest rates, which it kept at 0% at its last meeting in September, analysts said.
"The strong fall of the monthly inflation rate comes as a huge surprise. Yet it also comes after some upward surprises in the past months and is partly due to volatile package holiday prices that could also normalise again next month," said Karsten Junius, an economist at J.Safra Sarasin.
"Overall, I don't think today's data could convince the SNB to cut its policy rate again."
The data provided a reminder of the downside risks that persist for Swiss inflation, but was not enough to justify an immediate reaction by the SNB, according to GianLuigi Mandruzzato, an economist at EFG Bank.
Instead Switzerland is likely to face a prolonged period of low inflation due to weak domestic prices and a strong Swiss franc weighing on the cost of imports.
"In the next few months these factors will remain at work, reflecting the recent further fall in oil and EU natural gas prices, the further rise of the Swiss franc, and risks pushing Swiss CPI back below zero, albeit only temporarily," said Mandruzzato.
(Reporting by John Revill; editing by Mark Heinrich)
Key Takeaways
- •Swiss inflation fell unexpectedly in October.
- •Analysts say the dip won't prompt central bank action.
- •Prices rose by 0.1% year-on-year, below forecasts.
- •The Swiss National Bank's interest rate remains at 0%.
- •Strong Swiss franc and low domestic prices affect inflation.
Frequently Asked Questions about Surprise Swiss inflation dip not enough to warrant central bank action, analysts say
1What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is usually expressed as an annual percentage.
2What is a central bank?
A central bank is a financial institution that manages a country's currency, money supply, and interest rates. It also oversees the banking system and implements monetary policy.
3What are interest rates?
Interest rates are the cost of borrowing money or the return on savings, usually expressed as a percentage of the amount borrowed or saved, typically on an annual basis.
4What is the Swiss National Bank?
The Swiss National Bank (SNB) is the central bank of Switzerland, responsible for the country's monetary policy, including managing inflation and interest rates.
5What is the consumer price index (CPI)?
The consumer price index (CPI) measures the average change over time in the prices paid by consumers for a basket of goods and services, indicating inflation levels.
