Switzerland’s inflation remained at just 0.2% in September and it is likely to average close to zero over the coming years. This is in part due to temporary factors, such as reductions in the mortgage reference rate, but it also reflects structurally weak inflationary pressures with low inflation expectations and wage growth. We think it is only a matter of time before the SNB cuts its policy rate into negative territory.
Note that we will be discussing the outlook for the euro-zone, the major euro-zone economies and Switzerland in an online briefing today: registration here.
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