The reading - still the sixth month in a row that inflation has risen above the Swiss National Bank's 0-2% target range - comes amid expectations that the central bank could soon tighten policy again after hiking its policy rate in June for the first time in 15 years. [CH-ECI]

The index was unchanged versus June as prices for heating oil, clothing and footwear fell, offsetting higher prices for gas and supplementary accommodation.

The market had expected year-on-year inflation of 3.5%, according to a Reuters poll of 11 economists.

Core inflation that strips out volatile items like fuel and food prices fell 0.2% versus June and rose 2.0% year on year.

Ongoing inflationary pressure means further monetary policy tightening will likely be needed, Swiss National Bank Chairman Thomas Jordan has said.

The SNB has signalled it is prepared to see the Swiss franc strengthen as a way to choke off imported inflation, a departure from the campaign it waged for years to rein in the safe-haven currency whose strength hurts the export-reliant economy.

(Reporting by Michael Shields)