Switzerland’s consumer price inflation unexpectedly rose to a six-month high in February driven by food and energy prices and raised the scope for the fourth consecutive rate hike this month.<\/p>\n
The consumer price index, or CPI, grew 3.4 percent on a yearly basis that was slightly faster than the 3.3 percent increase seen in January, the Federal Statistical Office reported Monday. <\/p>\n
The inflation rate rose to the highest since August 2022. Economists had expected inflation to ease to 3.1 percent. <\/p>\n
The acceleration in overall annual inflation was largely driven by the 6.5 percent increase in food and non-alcoholic beverages prices. Housing and energy prices moved up 4.7 percent and transport costs grew 3.9 percent. <\/p>\n
Consumer prices gained 0.7 percent on a monthly basis after a 0.6 percent rise in the prior month. Economists had forecast prices to climb at a slower pace of 0.4 percent. <\/p>\n
The 0.7 percent monthly increase was due to several factors including rising prices for air transport, package holidays and supplementary accommodation.<\/p>\n
Core consumer prices gained 0.8 percent monthly in February and increased 2.4 percent from the same period last year. <\/p>\n
Capital Economics economist Adrian Prettejohn said the consumer price data suggests there is a long way to go before inflation returns to target, especially as underlying prices pressures show no signs of slowing.<\/p>\n
The economist expects the Swiss National Bank to raise its policy rate by 50 basis points to 1.5 percent at the March meeting. <\/p>\n
The central bank had raised its policy rate for the third straight meeting in December in order to counter rising inflationary pressures and spread of inflation.<\/p>\n
The SNB had lifted its policy rate by 0.5 percentage points to 1.0 percent in the December meeting.<\/p>\n
The central bank has forecast consumer prices to climb 2.4 percent this year and 1.8 percent in 2024. <\/p>\n