Inflation in Switzerland has fallen to its lowest level since October 2021. Measured against the same period last year, consumer prices rose by just 1.2% in February, according to the Federal Statistical Office (FSO) on Monday.
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Report by John Revill; written by Oliver Hirt, edited by Christian Götz., Reuters
In January, it was still 1.3%. Inflation in February was therefore clearly within the target range of the Swiss National Bank (SNB), which is aiming for a consumer price increase of between 0% and 2%. Despite the rising cost of rent and higher energy prices, the figure has been within targets since May 2023.
The new inflation data fuelled speculation that the SNB could lower the key interest rate from the current 1.75% at its next meeting on March 21.
“The further decline… shows that the price stability sought by the SNB has been restored,” explained GianLuigi Mandruzzato, economist at EFG International.
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The financial market currently puts the probability of a rate cut at 66%. UBS economist Alessandro Bee expressed caution, however. “Inflation risks have diminished significantly, but given the persistent nature of second-round effects, I don’t think the SNB considers inflation risks to have disappeared completely yet.”
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