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[ZURICH] Swiss consumer prices fell year-on-year in July for the ninth month in a row, highlighting deflationary pressure since the Swiss franc soared against the euro after the central bank removed a cap on the franc's value.
Consumer prices dropped 1.3 from July 2014, the Federal Statistics Office said on Tuesday, more than the 1.0 per cent they fell in June and the average forecast of a 1.1 per cent drop in a Reuters poll of economists. It was the steepest year-on-year drop since 1959.
Prices fell 0.6 per cent on a monthly basis, compared with a 0.4 per cent drop forecast in the Reuters poll. Prices had risen 0.1 per cent on the month in June.
The monthly decrease was mainly due to lower prices for clothing and new cars, the statistics office said. Heating oil and hotel stays were also cheaper. Petrol prices rose.
The Swiss National Bank abruptly removed its cap on the franc - set at 1.20 per euro - on Jan. 15. The franc's subsequent surge has lowered the price of imports into Switzerland from the eurozone.
The euro was trading around 1.0642 francs shortly after the price data.
The central bank has said it expects prices to fall this year and in 2016.