Finance
Swiss inflation falls to lowest level in three years
Published by Wanda Rich
Posted on November 1, 2024
Global Banking and Finance Review
Company
Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.
Published by Wanda Rich
Posted on November 1, 2024
ZURICH (Reuters) – Swiss inflation fell to its lowest level in more than three years in October, government data showed on Friday, pointing towards more interest rate cuts by the Swiss National Bank this year and into 2025.
Swiss consumer prices rose by 0.6% in October compared with the same month a year earlier, data from the Federal Statistics Office showed, lower than the 0.8% forecast in a Reuters poll.
The increase in prices was the lowest level since July 2021, and reflected cheaper food, clothing and household goods.
Month-on-month prices fell by 0.1%, the FSO said.
The Swiss franc fell to a five-week low following the data, in anticipation the SNB will cut borrowing costs to prevent inflation undershooting its 0-2% target range.
The SNB declined to comment.
Markets currently give a 72% probability the central bank will cut rates from 1% at its next meeting on Dec. 12 to 0.75%, and a 68% probability it will cut them again next March to 0.5%.
“The situation with falling inflation is becoming uncomfortable for the SNB, which will certainly cut rates by 25 basis points in December, although I wouldn’t be surprised if they cut by 50 basis points,” said Karsten Junius, an economist at J.Safra Sarasin.
“But I think it will prefer to keep something in reserve and cut rates again by 25 basis points in March and another 25 basis points in June to get to 25 basis points,” added Junius, who anticipated the SNB would also step up currency interventions in early 2025.
GianLuigi Mandruzzato, an economist at EFG Bank, said October’s inflation was much lower than the latest SNB forecast for inflation of 1% in the fourth quarter.
The data also raises the chances that the SNB will consider a larger rate cut of 0.5% instead of the standard 0.25% cuts implemented since March as the risk of negative inflation in 2025, if only temporarily, has clearly risen,” he said.
(Reporting by John Revill; Editing by Emelia Sithole-Matarise)