Swiss Inflation 0.1% Spurs Negative-Rate Bets

Switzerland’s annual inflation slowed to 0.1% in October, down from 0.2% in September, while the CPI fell 0.3% month‑on‑month for a third consecutive month. The decline was driven by lower prices in hotels, international package holidays and vehicle rentals, even as clothing, footwear and housing maintenance costs rose; imported goods fell 1.3% year‑on‑year while domestic goods rose 0.5%. Core inflation, excluding fresh products, energy and fuel, was 0.5% in October. The softer‑than‑expected reading prompted market moves and intensified speculation that the Swiss National Bank could cut policy rates back below zero as soon as December, with some forecasters penciling a 25 basis‑point cut to -0.25% and markets quickly pricing dovish SNB bets. Officials and analysts pointed to the Swiss franc’s haven‑driven strength as a key factor restraining inflation, leaving the SNB to weigh costly foreign‑exchange intervention against a politically sensitive return to negative rates.