Swiss Inflation Jumps on Higher Energy Prices — Update

By Don Nico Forbes

Swiss inflation jumped in August, reversing several months of cooling price growth as renewed tensions in the Middle East pushed global energy costs higher.

The annual rate of inflation was 0.8%, compared with 0.4% in July, Swiss data agency FSO said Thursday. This marks the highest level of inflation since 2024.

The FSO said the uptick was driven by several factors, including higher prices for petrol, diesel and heating oil, as well as rising housing rentals. The cost of imported products--which include energy--rose sharply.

On Tuesday, data showed inflation in the eurozone nearing a three-year high as an escalation of conflict in the Middle East drove energy prices up.

While Switzerland is relatively insulated from global energy-price swings compared with many of its European peers due to hydroelectric and nuclear power generation, inflation has risen from near zero at the start of 2026.

"We expect the headline rate to rise further over the coming quarters," said Ankita Amajuri, economist at Pantheon Macroeconomics.

"Overall, we think inflation will average 1.0% in the second half of the year, and then rise to an average of 1.2% over 2027," she said.

Still, inflation is set to remain within the Swiss National Bank's 0%-2% target range.

The SNB left interest rates unchanged at its June meeting. Chairman Martin Schlegel said then that the outlook for medium-term inflation remained broadly stable.

The central bank is unlikely to adjust rates at its next meeting in September, though a hike could come in the first quarter of next year, Amajuri said. The SNB is expected to raise its inflation forecasts this month, while investors will eye comments on the strength of the Swiss franc, she added.

At the June meeting, Schlegel signaled that the SNB was more prepared to step into currency markets if necessary to limit an excessive appreciation of the Swiss franc. The currency strengthened after the first military strike on Iran, adding to disinflationary pressure in Switzerland's export-dependent economy.

As a traditional safe-haven currency, the franc tends to rise during periods of geopolitical uncertainty. A stronger currency makes imported goods and services cheaper, helping to damp inflation.

Write to Don Nico Forbes at don.forbes@wsj.com

(END) Dow Jones Newswires

September 03, 2026 03:36 ET (07:36 GMT)