Consumer prices were unchanged in December compared with November, when they fell 0.2 percent month-on-month. Compared to their year-ago levels, prices rose 0.1 percent. International package holidays, medicines, vegetables and heating oil prices had a mitigating effect, offsetting jumps in the prices of hotel and supplementary accommodation.

The core inflation measure, which excludes seasonal products, energy, and fuels, was unchanged in December over November and rose 0.5 percent year-on-year.
International package holidays prices dropped 2.0 percent in December, while medicines fell 0.9 percent and heating oil dropped 5.5 percent.

However, hotels prices in December rose 3.1 percent over November, while supplementary accommodation prices jumped by 25.0 percent. Private transport services prices were by 22.5 percent over November's levels.

Overall prices for goods fell 0.6 percent from the previous month and were 1.7 percent lower than a year ago, with durable goods 0.4 percent less expensive than November while semi-durables dropped 1.2 percent month-on-month. At the same time, costs for services rose 0.4 percent month-on-month and increased 1.2 percent year-on-year.

Domestic prices, meanwhile, rose 0.2 percent during the reporting month and increased 0.5 percent year-on-year. Costs for imported goods fell 0.8 percent from the month before and 1.6 percent from a year ago, reflecting the strength of the Swiss currency.

It's a continuing storyline that there are no broad inflationary pressures in the economy, giving the Swiss National Bank some policy scope should the economic landscape deteriorate.

The consumer price index (CPI) is an average measure of the level of the prices of goods and services bought for the purpose of consumption by Swiss households. Monthly and annual changes in the CPI provide widely used measures of inflation. The policy target measure for the Swiss National Bank (SNB), the annual CPI rate can be distorted by swings in prices amongst the more volatile subsectors and the CPI excluding fresh food and energy is used as a better guide to underlying short-term trends. Although not a member of the Eurozone, a harmonized index of consumer prices (HICP), measured according to Eurostat's procedures, is also published alongside the CPI.

The consumer price index is the most widely followed indicator of inflation. An investor who understands how inflation influences the markets will benefit over those investors that do not understand the impact. Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets- and your investments. Inflation (along with various risks) basically explains how interest rates are set on everything from loans to notes and bonds. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities, and your portfolio, often in a dramatic fashion. By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.