Swiss consumer prices continue to fall

Switzerland has a reputation as a “high-price island” but prices have actually slowly gone down for ten months in a row. In August, prices dropped by 1.4% from a year ago, the most in 56 years, an indication of deflationary pressure.  According to the Federal Statistical Office, the consumer price index fell by 0.2% in August 2015 compared with the previous month, reaching 97.6 points (December 2010 = 100).  This means that prices fell 1.4% from a year ago, the steepest year-on-year drop since 1959.  This trend started in 2014 but sharpened from January when the Swiss National Bank (SNB) removed its cap on the franc, set at 1.20 per euro.  The franc’s subsequent surge has lowered the price of imports from the eurozone. In August, the cost of overall imports fell by 5.5% year on year, the statistical office said. Cheaper oil has helped reduce prices.  In the retail sector the research consultancy BAK Basel predicts further price reductions to kick in over the ...