Swiss inflation remained steady in October, leading to expectations that the Swiss National Bank (SNB) might maintain its current interest rates. The factors contributing to this stability included a year-on-year consumer price rise of 1.7%, driven by increased costs of heating oil, air transport, women's coats, imported wine, electricity, rents, and public transport. However, a decrease in prices for hotels, gasoline, and vegetables balanced these increases.
An increase in value-added tax also contributed to the inflation rate. Underlying inflation, which excludes volatile items such as food and energy, rose from 1.3% to 1.5%. Despite the SNB's pause in rate tightening in September, economists predict a peak inflation of 2% this quarter. This is anticipated despite an average power price rise of 18% in January.
Looking forward, economists are predicting an acceleration in inflation up to 2.2% in the coming months. However, it's worth noting that Swiss consumer-price growth remains one of the lowest among advanced economies. This is largely attributed to its strong currency as indicated by the European Union's harmonized measure.
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