Switzerland’s consumer price index (CPI) increased by 0.2% in August 2023 compared with the previous month, an annualised rate of 2.4%. However, year-on-year inflation was +1.6% compared with the same month of the previous year, below the Swiss National Bank’s (SNB) targeted maximum rate of 2.0%, reported Switzerland’s Federal Statistical Office (FSO).
The 0.2% increase compared with the previous month is due to several factors, wrote FSO. The rising prices of fuels and heating oil pushed the CPI higher in August. The cost of renting a house also climbed, reflecting higher mortgage interest rates and rising demand for housing. Rising prices in these areas were somewhat offset by declining airfares and international package holiday prices.
However, despite the latest annual rate coming in below the 2.0% maximum target, a further interest rate rise by the SNB on 21 September 2023 remains likely. Many expect the SNB to raise its rate from 1.75% to 2%. In addition, further price rises are expected. Health insurance premiums look set to rise, along with rents, as higher interest rates trigger hikes in the reference rate used to adjust the rent in many rental contracts, and the downward trend of energy prices has recently changed direction.