Monetary developments in the euro area: August 2025

The Swiss National Bank is leaving the SNB policy rate unchanged at 0%. Banks' sight deposits held at the SNB will be remunerated at the SNB policy rate up to a certain threshold. The discount for sight deposits above this threshold still stands at 0.25 percentage points. The SNB remains willing to be active in the foreign exchange market as necessary. Inflationary pressure is virtually unchanged compared to the previous quarter. Monetary policy helps to keep inflation within the range consistent with price stability and supports economic development. The SNB will continue to monitor the situation and adjust its monetary policy if necessary, in order to ensure price stability. Inflation has increased slightly since the last monetary policy assessment. It rose from -0.1% in May to 0.2% in August. This increase was mainly attributable to higher inflation in tourism and on imported goods. Inflationary pressure has barely changed compared to June. While inflation is likely to be slightly higher in the short term, in the medium term the conditional inflation forecast remains unchanged. The forecast is within the range of price stability over the entire forecast horizon (cf. chart). As in the previous quarter, it puts average annual inflation at 0.2% for 2025, 0.5% for 2026 and 0.7% for 2027 (cf. table). The forecast is based on the assumption that the SNB policy rate is 0% over the entire forecast horizon. Global economic grow SWISS NATIONAL BANK: GLOBAL ECONOMIC GROWTH SLOWED SOMEWHAT IN THE FIRST HALF OF 2025 GLOBAL ECONOMIC DEVELOPMENTS ARE BEING DAMPENED BY US TARIFFS AND ONGOING HIGH UNCERTAINTY SNB ANTICIPATES THAT GROWTH IN THE GLOBAL ECONOMY WILL BE SUBDUED OVER THE COMING QUARTERS…

At its meeting on 11 September 2025, the Governing Council decided to keep the three key ECB interest rates unchanged. Inflation is currently at around the 2% medium-term target ...