* CPI down 0.4 pct year/year, up 0.3 pct month/month
* Deflationary trend easing a year after SNB capped franc
* Franc weakens in recent weeks to around 1.21 per euro
ZURICH, Oct 8 The fall in Swiss consumer prices
eased slightly in September, a year after the central bank
imposed a cap on the soaring franc to ward off deflation and a
Swiss consumer prices fell 0.4 percent from a year ago,
compared to a drop of 0.5 percent in August, and were 0.3
percent higher compared with the previous month. Both figures
were in line with average analyst forecasts.
"The trend of the last two to three months of deflation
weakening has continued. What is responsible for this is that
the base effect from last year is disappearing," said Sarasin
economist Alessandro Bee.
"For the end of the year we expect inflation around zero so
that is no reason for the SNB to change course."
The SNB set the cap on the franc at 1.20 per euro on Sept. 6
2011 after investors seeking a safe-haven from the euro zone
crisis pushed the currency from one record to another.
Core inflation, which strips out volatile price elements
such as fuel, came in at minus 1 percent in September, down from
1.1 percent in August.
The franc spent months testing the 1.20 mark, forcing the
SNB to intervene heavily to defend the limit, yet an easing of
the euro zone crisis in recent weeks has seen it weaken against
the single currency to trade around 1.21.
The amount of cash commercial banks hold with the SNB -
called sight deposits and considered an early indicator of the
SNB's interventions - fell for the third week running last week
to 291 billion francs, data on Monday also showed.
The Swiss economy, which had proven surprisingly resistant
to the crisis in the euro zone, contracted in the second quarter
and the central bank expects growth to slow to 1 percent this
year, given slack momentum globally.
A string of data has painted a downbeat picture, with
manufacturing contracting for a fifth month running in August,
consumer sentiment weakening further in the third quarter, and
the ZEW investor sentiment index down in September.
For any market reaction, click on, or
For a story on Swiss economy click on
For recent Swiss National Bank comments