ZURICH, Nov 5 (Reuters) - Swiss annual consumer prices edged lower in October compared with a year ago, underscoring the need for the cap on the franc to counter deflationary pressures.
Prices fell 0.1 percent month-on-month, a touch milder than forecasts, driven mainly by lower prices for oil and oil products, meat and fruit and vegetables.
The Swiss National Bank imposed the 1.20 per euro cap in September 2011 after investors looking for a safe haven from the euro zone crisis piled into the Swiss franc, sending it to a series of record highs.
It almost hit parity with the single currency and threatened to tip the economy into recession.
Switzerland's economy will power ahead in the next few months, helped by domestic consumption and exports to the European Union, the country's leading indicator showed last week, underlining the success of the lid on the franc.
Both the Swiss National Bank and the government have raised their growth forecasts for the Swiss economy for 2013.
Earlier this month, SNB Chairman Thomas Jordan reiterated the SNB would maintain the franc cap to ensure price stability in the foreseeable future and stood ready to enforce it with further measures if needed.
(Reporting by Alice Baghjian; Editing by Alistair Lyon)
Keywords: SWISS ECONOMY/CPI
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