Consumer prices rose 2.4 percent from a year earlier, the Federal Statistics Office in Neuchatel said today. That is the highest level since December 1993. Economists expected January inflation of 2.2 percent, according to the median of 17 forecasts in a Bloomberg News survey. From the previous month, consumer prices fell 0.3 percent.
The central bank forecast Dec. 13 that there would be a ``temporary'' rise in inflation as oil headed for a record $100.09 a barrel on Jan. 3 amid soaring prices for commodities such as milk and wheat. The Swiss central bank expects the rate to fall back below 2 percent, its definition of price stability, as the pace of the economic expansion slows.
The price of oil has fallen 11 percent since its Jan. 3 record, which may relieve some inflation pressures. At the same time, a 3.4 percent gain by the Swiss franc against the euro since late December is helping make imports less expensive.
The franc declined to 1.6012 against the euro at 11:22 a.m. in Zurich from 1.5993 yesterday. Against the dollar, the Swiss currency fell to 1.1057 from 1.1041.
Swiss consumer confidence declined in January to its lowest in more than a year, according to a separate report today, as a worsening global outlook damped spending plans.
With a recession looming in the U.S. and threatening to be a drag on European economies, investors expect the SNB to cut rates at least once in the first half of the year, futures trading shows. The implied rate on the three-month Liffe contract expiring in June was 2.37 percent at 8:43 a.m. in Zurich.