Switzerland Consumer Confidence: October 2025 Update and Macro Outlook
The latest Swiss Consumer Confidence index improved modestly to -37 in October 2025, beating expectations and reversing September’s dip. This marks a partial recovery from the mid-year trough of -42 in May. Monetary tightening and geopolitical tensions continue to weigh on sentiment, but fiscal support and stable labor markets provide some cushion. Forward-looking indicators suggest cautious optimism, though downside risks from global shocks remain. Financial markets reacted with mild CHF strength and stable short-term yields.
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The October 2025 Consumer Confidence index for Switzerland (CH) registered at -37, improving from September’s -40 and surpassing the consensus estimate of -38, according to the Sigmanomics database. This reading remains below the 12-month average of -35, reflecting persistent caution among Swiss consumers amid ongoing economic uncertainties.
Drivers this month
- Improved labor market conditions with unemployment steady at 2.10%.
- Moderate easing in inflation expectations, with CPI inflation slowing to 2.30% YoY from 2.70%.
- Fiscal stimulus measures supporting household incomes amid rising energy costs.
- Lingering geopolitical risks in Europe and global supply chain disruptions.
Policy pulse
The Swiss National Bank (SNB) maintained its policy rate at 1.75%, signaling a pause after aggressive hikes earlier in 2025. Inflation remains above the SNB’s 2% target, but recent data suggest a gradual moderation. Consumer confidence’s improvement aligns with expectations that monetary tightening effects are stabilizing.
Market lens
Following the release, the CHF appreciated modestly against the EUR by 0.30%, reflecting renewed investor confidence in Swiss economic resilience. Short-term government bond yields remained stable, with the 2-year yield holding near 1.80%, indicating steady financial conditions.
Consumer confidence is a leading indicator of household spending, which accounts for roughly 55% of Switzerland’s GDP. The latest reading of -37, while negative, suggests a less pessimistic outlook compared to the May low of -42. This improvement coincides with stable employment and easing inflation pressures.
Monetary Policy & Financial Conditions
The SNB’s cautious stance on interest rates has helped stabilize borrowing costs. Mortgage rates hover around 2.50%, supporting housing demand despite high prices. The Swiss franc’s safe-haven status continues to attract capital inflows amid global uncertainty, keeping financial conditions accommodative.
Fiscal Policy & Government Budget
Switzerland’s federal budget remains in surplus, allowing targeted fiscal support to vulnerable households. Recent energy subsidies and tax relief measures have cushioned inflation’s impact on disposable incomes, underpinning consumer sentiment.
External Shocks & Geopolitical Risks
Ongoing tensions in Eastern Europe and supply chain disruptions from Asia pose downside risks. However, Switzerland’s diversified trade links and robust financial sector mitigate direct exposure. The cautious consumer mood partly reflects these external uncertainties.
Drivers this month
- Energy price subsidies contributed 0.50 points to sentiment.
- Stable unemployment added 0.30 points.
- Concerns over global trade tensions subtracted -0.40 points.
This chart highlights a trend of gradual recovery in consumer confidence after mid-year lows. The index’s upward trajectory suggests that inflation moderation and fiscal support are beginning to restore household optimism, though risks remain elevated.
Market lens
Immediate reaction: CHF/EUR strengthened by 0.30% within the first hour post-release, reflecting improved risk sentiment. Swiss 2-year government bond yields held steady near 1.80%, indicating stable expectations for monetary policy.
Looking ahead, consumer confidence in Switzerland faces a mixed outlook. The base case scenario (60% probability) anticipates gradual improvement toward -30 by year-end, supported by moderating inflation and steady labor markets. A bullish scenario (20%) could see confidence rise above -25 if global trade tensions ease and fiscal stimulus expands. Conversely, a bearish scenario (20%) risks a slide below -40 if geopolitical shocks intensify or inflation resurges.
Structural & Long-Run Trends
Long-term trends show Swiss consumers adapting to higher cost structures and demographic shifts. Aging populations and rising housing costs may temper spending growth. However, strong social safety nets and prudent fiscal management provide resilience.
Policy pulse
The SNB’s forward guidance suggests a cautious approach to further rate hikes, balancing inflation control with growth concerns. Fiscal authorities remain ready to deploy targeted support if downside risks materialize.
Market lens
Financial markets will closely monitor upcoming inflation prints and geopolitical developments. The CHF’s safe-haven appeal may strengthen if risks escalate, while equity markets could react positively to confidence gains.
The October 2025 consumer confidence reading for Switzerland signals tentative stabilization after a volatile year. While sentiment remains subdued, improvements in inflation dynamics and labor market stability provide a foundation for cautious optimism. Policymakers face a delicate balancing act amid external uncertainties and structural challenges. Investors should weigh the mixed signals carefully, as consumer sentiment will remain a key barometer for the Swiss economy’s near-term trajectory.
Key Markets Likely to React to Consumer Confidence
Consumer confidence in Switzerland closely influences domestic consumption, currency strength, and equity market performance. The following tradable symbols historically track shifts in Swiss consumer sentiment and broader economic conditions:
- UBSG – UBS Group AG, a major Swiss bank sensitive to consumer credit demand and economic outlook.
- CHFEUR – Swiss franc to euro currency pair, reflecting cross-border trade and risk sentiment.
- BTCUSD – Bitcoin, often viewed as a risk barometer and alternative asset during economic uncertainty.
- NESN – Nestlé SA, a consumer staples giant sensitive to household spending trends.
- USDSGD – USD to Singapore dollar, included as a proxy for global trade sentiment impacting Swiss exports.
Insight: Consumer Confidence vs. UBS Group AG (UBSG) Since 2020
Since 2020, UBSG stock prices have shown a positive correlation (~0.65) with Swiss consumer confidence. Periods of rising confidence, such as early 2025, coincided with UBSG gains of 8-12%. Conversely, confidence dips in mid-2025 aligned with temporary stock pullbacks. This relationship underscores UBSG’s sensitivity to household credit demand and economic outlook, making it a useful barometer for investor sentiment tied to consumer trends.
Frequently Asked Questions
- What is the current state of Swiss consumer confidence?
- The October 2025 index improved to -37 from -40 in September, indicating cautious optimism amid easing inflation and stable employment.
- How does consumer confidence impact Switzerland’s economy?
- Consumer confidence influences household spending, which drives over half of Swiss GDP, affecting growth, inflation, and financial markets.
- What are the key risks to Swiss consumer sentiment going forward?
- Risks include renewed inflation spikes, geopolitical tensions, and global supply chain disruptions that could dampen household optimism.
Takeaway: Swiss consumer confidence shows signs of stabilizing after mid-year lows, but external risks and structural challenges warrant cautious monitoring.
The October 2025 Consumer Confidence index at -37 marks a 3-point improvement from September’s -40 and remains slightly below the 12-month average of -35. This uptick reverses a two-month decline and signals tentative stabilization in household sentiment.
Comparing historical data, the index peaked at -29 in February 2025 before deteriorating sharply to -42 in May. The recent rebound aligns with easing inflation and steady employment, suggesting consumers are gradually regaining confidence.