Swiss consumer prices edge higher on petrol costs in August

• Switzerland's August consumer price index rose 0.4% month-on-month, versus an expected 0.0% and a prior -0.1%
• On an annual basis, the CPI climbed 0.8%, compared to the 0.5% forecast and July's 0.4% gain
• Core CPI stood at 0.4% year-on-year, up from 0.3% previously

Petrol prices surged 25% from a year earlier, providing the main upward push to Swiss inflation in August. As a result, the headline annual rate doubled compared with July.

However, core annual inflation rose only slightly. The Swiss National Bank (SNB) regards this measure as more important when setting monetary policy.

Overall, Switzerland remains near the low end of the SNB's 0% to 2% price stability target range. Unlike most major economies, the central bank is therefore not in a hurry to change its policy stance to address inflation.

The franc complicates the SNB's outlook. As a safe-haven currency, fresh geopolitical tensions could drive the franc higher, reducing import costs and further depressing inflation. That means policymakers may worry more about excessive franc strength and renewed disinflation than about any imminent inflation threat.

In summary, the message is clear: Swiss inflation is low, policy is already neutral at 0%, so the bar for either another cut or a rate hike remains high.