Swiss inflation hits two-year high of 1%

ZURICH, Oct 1 (Reuters) - Swiss annual inflation accelerated to 1.0% in September, the highest rate in just over two years, and in line with analysts' forecasts, official data showed on Thursday.

Month-on-month, prices in Switzerland were unchanged, also in line with the consensus forecast of a Reuters poll of economists. Swiss annual inflation stood at 0.8% in August.

The data from the Federal Statistics Office showed that while prices for heating oil, petrol and diesel rose due to the war in Iran, items such as package holidays, car rentals and hotels became cheaper.

The uptick in Swiss inflation to its highest since August 2024 followed a decision last week by the Swiss National Bank to keep its benchmark interest rate on hold at zero.

GianLuigi Mandruzzato, an economist at EFG Bank, said while inflation was in line with the SNB's latest projections, there were signs that domestic prices may start reflecting more pass-through of the energy price shock and higher import costs.

Those factors, and the Swiss franc's recent depreciation, could keep inflation elevated for longer than forecast unless the SNB adopts a less accommodative monetary policy stance, he said.

The SNB targets an inflation rate in the range of 0-2%.

Karsten Junius, an economist at J. Safra Sarasin, said in a research note that the acceleration in inflation meant the SNB is moving closer to a rate hike next year.