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
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Published by Global Banking and Finance Review
Posted on November 3, 2025
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.
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.
The figure missed forecasts for a 0.3% rise in a Reuters poll, as food and clothing became cheaper.
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.
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)