The combined producer and import price index rose 0.3 percent on the month in August, its first increase since March. As a result, the annual inflation rate climbed fully 0.7 percentage points to 0.6 percent.
However, August's monthly spurt was wholly attributable to import prices which jumped 1.1 percent and now stand 2.7 percent higher on the year. The recent slide in the value of the CHF will have been an important factor here. By contrast, domestic producer prices dipped 0.1 percent and now show a yearly decline of 0.5 percent.
Within the PPI, agriculture and forestry products dropped a monthly 1.3 percent as did consumer non-durables but intermediates were up 0.7 percent and energy jumped 1.3 percent. The core PPI fell 0.2 percent versus July and was 1.2 percent weaker than a year ago.
For the composite headline index, underlying prices were only unchanged on the month and down 0.5 percent on the year, matching their July decline. Domestically generated pipeline pressures remain very subdued and this will reinforce the SNB's preference for a weaker CHF and help to ensure a dovish statement at tomorrow's monetary policy update.