Swiss headline inflation rose to 1.5% year on year in October, above expectations. Energy prices accounted for nearly all of the monthly increase, while core inflation held steady.
Swiss headline CPI rose from 1.0% to 1.5% yoy in October, above market expectations of 1.3%. On a monthly basis, consumer prices increased from 0.0% to 0.2%, against expectations of no change.
Energy drives the monthly rise
Energy was the main driver. It contributed 0.197 percentage points to the overall monthly CPI rise of 0.206 percentage points, or approximately 96% of the net increase.
Fuel and energy prices rose 3.5% mom, following 2.3% in September, while petroleum products increased 6.4%. Within that group, heating oil jumped 9.8%, diesel rose 6.0% and petrol gained 4.9%.
Imported product inflation also picked up. It accelerated from 2.1% to 3.7% yoy, with prices rising 1.2% on the month. Imported products contributed 0.263 percentage points to CPI, more than the overall increase, because falling domestic prices partially offset them.
Core and domestic prices stay subdued
Underlying measures told a different story. Core CPI stayed unchanged at 0.5% yoy and was flat on the month. The divergence suggests the headline acceleration was concentrated in specific components rather than reflecting a broad-based strengthening of domestic price pressures.
Domestic product prices fell 0.1% mom, following a 0.2% decline in September, while annual domestic inflation edged up only from 0.7% to 0.8%. Goods prices increased 0.8% on the month, but services prices declined 0.2%, with lower healthcare, hotel and international package holiday prices providing offsets.
CPI excluding petroleum products was unchanged on the month. Stable core readings and weak domestic price developments suggest broader inflationary pressures remain contained for now, according to ActionForex.
Source: ActionForex
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