Swiss inflation hits a three-year high, yet the SNB is expected to hold at 0%

Swiss inflation reached a three-year high in October, driven by a weaker franc and rising energy costs. Even so, the Swiss National Bank is expected to leave its policy rate at 0% when it meets on Thursday 10 December, and a 25 basis point hike at that meeting is unlikely. The main reason is the tone from the top. Chairman Martin Schlegel said there were no signs of a broadening in price pressures and that the bank had fulfilled its mandate of maintaining price stability over the medium term. Energy accounts for only a small share of the Swiss consumer price basket, which limits how much the October jump should weigh on policy. Forecasters point the same way. A survey by the Swiss Bankers Association, reported on 31 August, found every respondent expecting the rate to stay at 0% for the rest of 2026. Some 40% expected hikes to start in 2027, mostly to 0.25%. Reports indicate that economists see the first hike in late 2027, while financial markets expect a move in early 2027. The risk is real but narrow. Schlegel also said the SNB would not hesitate to act if price stability were threatened, and a surprise is not impossible. That survey is from late summer and is not a record of the coming decision. What to watch is any sign of second-round effects in prices before 10 December. Evidence that the energy and franc-driven rise is spreading would be the thing most likely to bring a hike forward.