Nov. 7 (Bloomberg) -- Swiss consumer prices unexpectedly dropped in October from a year earlier, adding pressure on the central bank to raise its franc ceiling to protect the economy.
Consumer prices decreased 0.1 percent from a year earlier after rising 0.5 percent in September, the Federal Statistics Office in Neuchatel said in an e-mailed statement today. Economists forecast prices to rise 0.2 percent from a year earlier, according to the median of 13 estimates in a Bloomberg News survey. In the month, prices slipped 0.1 percent.
The Swiss National Bank in September introduced a franc cap of 1.20 against the euro to fight deflation threats and bolster exports. President Philipp Hildebrand told NZZ am Sonntag in an interview published yesterday that policy makers are “ready to take further measures” if needed. He also said there’s a risk of recession if the currency fails to weaken.
“The question is whether the SNB wants to take the market on for the second time in two months,” said Michael Derks, chief strategist at FXPro Financial Services Ltd. in London, in an e-mailed note today. “Last time it won. This time, and given current levels and positioning, it may be that little bit harder.”
Prices of imported goods dropped 1.9 percent from a year earlier, while remaining unchanged in the month, today’s report showed. Costs of domestic goods rose 0.5 percent from a year earlier and fell 0.1 percent from September.
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