ZURICH (Sept 3): Swiss inflation doubled in August, government data showed on Thursday, as the conflict in the Middle East pushed fuel prices higher, raising the prospect of an earlier interest rate hike by the Swiss National Bank.

Swiss consumer prices were 0.8% higher than in August 2025, figures from the Federal Statistical Office showed, up from the 0.4% rate in July.

The jump, which exceeded economists' forecasts for prices to rise by 0.5%, was driven by 25% increase in petroleum prices.

Fuel prices in Switzerland have climbed sharply this year mainly because of the war in Iran and the resulting Strait of Hormuz blockage, which disrupted global oil and gas supplies and pushed crude prices up worldwide.

Month on month, Swiss prices were 0.4% higher, the Federal Statistical Office said.

The reading was the last before the Swiss National Bank's (SNB) next interest rate decision, which is due on Sept 24.

With inflation well within the central bank's 0% to 2% target range, markets do not expect the central bank to change its current policy rate of 0% until March 2027 at the earliest.

The central bank declined to comment on the latest inflation figures on Thursday.

Still, analysts said the jump in prices raised the likelihood of the SNB raising interest rates earlier than next March.

"Although the SNB is not under any immediate pressure, given that inflation remains relatively low in absolute terms, price risks have shifted to the upside in Switzerland as well," said VP Bank economist Thomas Gitzel.

"An interest rate hike in December cannot be completely ruled out."

GianLuigi Mandruzzato, economist at EFG Bank, said the SNB was not under any immediate pressure to act, but would now consider hiking rates.

"With the economy growing above potential and increased pressure on prices from imported goods, there is a risk that a tightening of monetary policy will be on the SNB's agenda towards the end of 2026 or in early 2027," he said.

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