Swiss inflation in January rises to higher than expected 3.3%

ZURICH, Feb 13 (Reuters) - Swiss consumer prices rose by 3.3% in January - marking a year that inflation has remained above the Swiss National Bank's 0-2% target range, data showed on Monday. The increase was more than expected, with economists forecasting the year-on-year rate to rise to 2.9%, up from the 2.8% rate seen in December. Prices were 0.6% higher month-on-month due to more expensive electricity and gas. Hotel accommodation also recorded a price increase, as did bread and coffee.

In contrast, prices for air transport and petroleum products decreased as well as for clothing and footwear, the latter due to seasonal sales.

Core inflation that strips out volatile items like fuel and food prices was flat compared with versus December and 2.2% higher compared with January 2022. Although low in international comparisons, the average Swiss inflation rate of 2.8% in 2022 was the highest annual rate since 1993. The SNB has recently repeated its commitment to bring inflation back to its target level of 0-2%, raising the possibility of further interest rate hikes to bring price rises under control. The SNB declined to comment on Monday.

"Headline inflation is clearly above the 2% mark in January and core inflation has not definitely passed its peak. This will result in a further rate hike by the SNB in March by 50 basis, in our view," said UBS economist Alessandro Bee. "However, in 2Q23 the SNB will certainly notice that inflation is about to drop below the 2% mark which may give the SNB a reason to keep interest rates on hold for the remainder of the year." (Reporting by John Revill)

Messaging: john.revill.thomsonreuters.com@reuters.net))

Reuters

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Swiss inflation in January rises to higher than expected 3.3%

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