Switzerland’s CPI inflation slows to 2 1/2-year low

Annual consumer inflation in Switzerland has eased further in March, to 1% from 1.2% in February, data by the Swiss Federal Statistical Office showed.

The actual figure confounded market expectations of an increase to 1.3%.

March’s CPI inflation rate has been the lowest since September 2021.

The prices of food and non-alcoholic beverages dropped 0.4% YoY in March, after rising 0.8% in February.

The cost of healthcare went down 0.5% YoY in March, while that of transport also decreased 0.5%.

Conversely, inflation accelerated for housing and utilities (3.2% YoY versus 3.1% YoY in February), recreation and culture (1.8% YoY versus 1.7% YoY in February) and other goods and services (1.1% YoY versus 1% YoY in February).

The Swiss Franc was 0.47% weaker on the day against the US Dollar, with the USD/CHF currency pair last trading at 0.9071.

The Swiss currency held in proximity to a fresh 5-month low of 0.9095, which it registered on Wednesday, amid a monetary policy divergence between the Swiss National Bank and the Federal Reserve.

The SNB reduced its key interest rate by 25 basis points to 1.5% in March to become the first major central bank delivering a rate cut after the start of global disinflation in 2023.