By Ed Frankl
Swiss inflation edged up in the final month of 2025, as the country's central bank considers its course amid a fragile economy and the threat of more deflationary pressures.
Inflation climbed to 0.1% in December from 0.0% in November, the first rise in five months, Switzerland's statistics office said Thursday.
While lower-than-expected inflation in recent months and an economy that contracted in the third quarter raised some expectations that the Swiss National Bank could cut rates again below zero, the inching up of inflation could allay some nerves among policymakers.
The SNB held its key rate at 0% for a second straight meeting in December, after six consecutive quarterly cuts. It said further cuts remained an option.
But its Chairman Martin Schlegel has repeatedly said there is a higher bar to cutting rates below zero than to lowering borrowing costs when rates were positive, given the strain it causes to savers, bank profits and pension funds. The Alpine nation had negative interest rates for more than seven years until September 2022.
The bank said in December that while inflation in recent months had been lower than forecast, in the medium term, inflation pressures were virtually unchanged compared to its prior meeting in September. Investors expect the SNB to hold its key rate again in March.
Write to Ed Frankl at edward.frankl@wsj.com
(END) Dow Jones Newswires
01-08-26 0303ET
