Inflation in Switzerland stabilized in July but remains above the Swiss National Bank's target

The rate of consumer price inflation in Switzerland reached its 29-year high in June. It remained at 3.4%, lower than economists had forecast.

For half a year now, the inflation rate has been above the 0-2% target range set by the Swiss National Bank. These figures were formed due to expectations of a tightening of central bank policy. This followed the first key rate hike in 15 years in June.

The index has remained unchanged since June, as rising gas prices and additional housing subsidies are offset by falling prices for heating oil, clothing and shoes.

Reuters polled 11 economists who said the market was in anticipation of an annual inflation rate of 3.5 percent.

The rate of core inflation, which does not include fuel, food and other volatile items, was down 0.2% from June. On an annualized basis, core inflation rose 2.0%.

Analyst Michael Tran of Capital Economics noted in a note to clients that inflation in Switzerland likely peaked in July. Compared to other developed countries, Switzerland has managed to keep inflation fairly low. Despite this, the national bank may raise rates in September or sooner, due to the highest prime rate in more than 20 years.

Thomas Jordan, chairman of the Swiss National Bank, said that the subsequent tightening of monetary policy is caused by existing inflationary pressures.

According to the Swiss National Bank, imported inflation can be suppressed by the strengthening of the Swiss franc. However, this means that the bank will step back from the campaign it has been conducting for many years. This will make it possible to curb a safe-haven currency, the stability of which is dangerous for export-dependent economies.