Swiss Inflation Accelerates on Higher Energy Prices

Oct 2, 2007 - Swiss inflation accelerated in September, led by higher costs for heating oil.

Consumer prices rose 0.7 percent from a year earlier after increasing an annual 0.4 percent the previous month, the Federal Statistics Office in Neuchatel said today. Economists expected an inflation rate of 0.8 percent, according to the median forecast of 18 economists surveyed by Bloomberg News.

The Swiss central bank raised its key interest rate on Sept. 13 even as defaults on U.S. subprime mortgages pushed up the cost of credit and clouded the global growth outlook. The Swiss National Bank said rising energy prices and a declining currency may push up import prices and stoke inflation.

"Switzerland still has a low-inflation environment," said Jan Amrit Poser, chief economist at Bank Sarasin in Zurich. "We've had some inflationary pressure from petrol, but the core price index is not signaling danger in any way."

The Swiss economy will probably grow 2.5 percent this year after expanding 3.2 percent in 2006, the fastest pace since 2000, according to the central bank. The SNB forecasts inflation will average 0.6 percent this year and 1.5 percent in 2008.

Energy and housing costs gained 2.4 percent in the year because of higher heating-oil prices, today's report showed. Alcoholic-beverage and tobacco prices advanced 2.9 percent from a year earlier, while the cost of clothing and shoes increased 3.2 percent from a year earlier and was unchanged in the month, according to the statistics office.