Inflation in Switzerland fell unexpectedly in January, potentially paving the way for the Swiss National Bank (SNB) to cut rates next month.
ADVERTISEMENTThe annual inflation rate in Switzerland fell to 1.3% in January from 1.7% the previous month, marking the lowest reading in since October 2021, according to the country's Federal Statistical Office.
This has led to analyst predictions that the Swiss National Bank (SNB) might lower interest rates in March.
According to Bloomberg, the price drops were unexpected, especially as Switzerland regulates many prices.
"The SNB is unlikely to declare victory yet as domestic products increased by 0.6% month-on-month and 2.0% year-on-year," said J Safra Sarasin economist Karsten Junius.
"That said, the huge downward surprise increases the probability of a rate cut in March."
Additionally, inflation for housing and utilities slowed to 2.5% from 3.3% in December, while those for food and non-alcoholic beverages eased to 2.3% compared to 3.3%.
On a monthly basis, the CPI grew 0.2%, which was below market expectations of a 0.6% jump and after stagnating in December. Meanwhile, the core rate, which excludes volatiles items such as unprocessed food and energy, moderated to 1.2% from a prior 1.5%.
Following the release of the inflation figures, the Swiss franc weakened by 0.4% against the euro and was trading at €0.947 per franc.
