Swiss consumer prices rose year-on-year for the first time since 2014 in January, though another negative core reading showed the scale of the task the central bank faces in trying to break an underlying cycle of deflation. Prices have declined in recent years due to the high value of the Swiss franc, which made many imports cheaper, while a weak economy has made it hard for companies to charge more for goods and services.
Helped by a rise since early 2015 in prices for housing, energy and transport, year-on-year inflation was 0.3 percent in January, the Federal Statistics Office said on Tuesday - the first positive reading since August 2014. But excluding volatile inputs such as oil, gas and fresh produce, the reading remained negative at -0.3 percent.
The Swiss National Bank, which has adopted negative interest rates and periodic interventions to keep a lid on the value of the rank, has a price stability target in a range between zero and 2 percent inflation. "The SNB has a goal of keeping consumer prices stable, but these have been declining in the last couple of years, so the increase is a good sign," said UBS economist Alessandro Bee. He said he expected consumer prices to rise by 0.4 percent in 2017 and 0.9 percent in 2018 following a 0.4 percent decline in 2016.
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