Swiss Inflation Drops

Swiss inflation unexpectedly eased, reinforcing the case for the central bank to keep interest rates unchanged.

Consumer prices fell 0.3 percent from July and core inflation, which excludes food, tobacco, fuel and seasonal products, rose 1.4 percent from a year earlier and increased 0.2 percent from June. Heating oil dropped 10.5 percent from July, carrots fell 11.1 percent and cabbage prices declines 13.3 percent.

From the second quarter of last year, the economy grew at a rate of 2.3 percent, down from 3 percent in the previous three months, today's report showed.

Slower growth and the 20 percent drop in the cost of oil from a record $147.27 a barrel on July 11 may ease price pressures. Swiss leading economic indicators declined to the lowest in five years in August and a consumption indicator fell to the lowest since December 2006.

Swiss Inflation Drops, Bloomberg
9/2/2008 6:42:40 AM