Switzerland saw its first year on year increase in consumer prices in more than two years in January, as rising energy prices drove inflation to a whopping 0.3 per cent.

The annual figure was in line with forecasts, but the economy recorded a stronger than expected monthly figure. Prices remained flat on the month, in contrast to predictions of a 0.1 per cent decline.

Prices for clothing and air travel continued to decline but the falls were offset by higher hotel and energy prices.

Switzerland has struggled to climb out of deflation despite the Swiss National Bank lowering interest rates to -0.75 per cent, as the strength of the Swiss franc has drove down the cost of imports. However, in recent months it has been affected by the same rise in energy prices that has sent inflation in the eurozone to a four-year high.

Chart courtesy of Bloomberg

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