Switzerland’s Interest Rate Cuts Unlikely in the Near Future

Are interest rate cuts expected soon?

No. Switzerland has the highest proportion of administered prices in Europe – i.e. those that are dictated or regulated by government or government-related institutions. These smooth out price increases. This means that prices also rise, but later and usually at a more moderate rate. Price growth in Switzerland is therefore likely to remain in the upper range of the range defined by the SNB for a while. The SNB is therefore unlikely to bring itself to cut interest rates so quickly. It will leave interest rates at the current level for the time being so as not to give inflation a new opportunity to develop.