Swiss Nov core prices flat y/y, SNB seen holding rates

ZURICH, Dec 3 (BestGrowthStock) – Core inflation measures showed
Swiss consumer prices unchanged in the year to November as the
strong Swiss franc dampened price pressures, providing more
reason to keep interest rates low to avoid risk of deflation.

The Swiss National Bank took drastic steps including
currency interventions during the financial crisis to keep the
Alpine country out of a harmful spiral of falling prices and
weakening demand.

But it ended these measures earlier this year as the economy
bounced back from the recession.

In November, core inflation excluding foodstuffs, drinks,
tobacco, seasonal products and fuel, showed prices were flat
from a year earlier, the Federal Statistics Office said on
Friday.

Overall, consumer prices rose 0.2 percent from a year ago,
just above analysts’ expectations.(ECONCH: ) Prices were 0.2
percent higher than in October.

“Core inflation remains very low. It is flat year-on-year.
It shows no price pressure to the upside for now. The SNB will
keep interest rates on hold at its December meeting,” Sarasin
analyst Ursina Kubli said.

“On the one hand, we have strong economic growth but the
stronger Swiss franc has led to monetary tightening already so
it is too early for the SNB to raise rates at the current
stage,” she said.

The SNB, which is due to decide on interest rates on Dec.
16, said at its latest quarterly meeting in September, that
consumer prices could fall again on the year for a brief period.

Overall, however, the SNB’s medium-term inflation forecast
did not signal a persisting deflation threat.
(Reporting by Katie Reid; editing by Stephen Nisbet)

Swiss Nov core prices flat y/y, SNB seen holding rates