Swiss Inflation Hits 1.0% as Julius Baer Predicts Zero Rates Until 2027

Swiss Inflation Rises to 1.0% in September Amid Energy Pressures

Sophie Altermatt, Head of Economic Research at Julius Baer wealth management bank, has released a comprehensive economic analysis examining the recent uptick in inflation in Switzerland, as well as the outlook for the Swiss National Bank (SNB) interest rates through 2027.

According to the report, Swiss consumer price inflation rose to 1.0% in September, up from 0.8% in August, driven primarily by higher energy costs including heating oil, gasoline, and diesel. Core inflation, excluding petroleum products, remained exceptionally subdued at 0.3%, indicating that underlying domestic price pressures remain largely contained.

Outlook for SNB Interest Rates and Monetary Policy

Despite the headline acceleration, Julius Baer maintains its baseline scenario that the SNB will keep its policy interest rate at 0% for an extended period, projecting no rate hikes until September 2027.

"The September inflation data was fully in line with consensus expectations and SNB projections. However, an earlier rate hike remains a tangible risk, especially if price pressures broaden beyond energy or if inflation prints exceed central bank forecasts," noted Sophie Altermatt.

Outside of energy, categories such as information and communication equipment—including smartphones and personal computers—recorded notable monthly price increases in September. Analysts attribute this upward drift partly to surging global semiconductor prices driven by robust artificial intelligence demand.

Market Pricing Versus Central Bank Guidance

While Julius Baer anticipates a prolonged pause, financial markets are currently pricing in roughly a 30% probability of an SNB rate hike by December 2026, alongside expectations for more aggressive monetary tightening throughout 2027.