Swiss inflation turned negative in May, marking the first decline in consumer prices for more than four years and adding pressure on the Swiss National Bank to cut its interest rate steeply later this month.
Consumer prices fell by 0.1% in May compared with a year earlier, according to data from the Federal Statistics Office on Tuesday, the lowest reading since March 2021 when the Swiss economy was hit by the COVID-19 crisis.
An interest rate cut by the SNB at its next meeting on June 19 is seen as a certainty by the market, which gives a 69% probability the central bank will cut rates from 0.25% at present to 0%.
Markets now give a 31% probability the SNB will cut its key interest rate to -0.25%, returning Switzerland to an era of negative interest rates which were in place from late 2014 to 2022.
The Swiss National Bank declined to comment on Tuesday.
