Swiss consumer inflation slows

Over the last month, Swiss inflation has fallen as it has mirrored the drop in the price of oil.

The average Swiss family is likely to still see increases in consumer prices during this quarter even though there has been a 55 percent fall in the price of oil and energy costs.

Most importantly it is consumer prices that are likely to drop according to forecasts, even though they were at a year high of 2.9 percent in September according to the Federal Statistics Office in Neuchatel.

Analysts predict that consumer prices will drop to 2.5 percent and this is driven by the opinion that inflationary pressures reached their height back in July and so inflation should make its way back over the next few months as it cools across the euro zone.

Inflation is now seen as a secondary danger, rather than the economic slowdown, which has affected business confidence and the service sector which pays such a large part in the nation’s economy.

The current financial turmoil has affected Swiss banks as well as the insurance and finance industries, so predictions lead towards the Swiss economy to shrink over the next two quarters.

Switzerland’s interest rates are now at just 2.5 percent which is third to only Japan at 0.3 percent and the US at 1 percent, although there will be another monetary policy meeting before the end of the year it is difficult to predict if interest rates will fall again.

Story link: Swiss consumer inflation slows