A measure of underlying inflation in Switzerland slowed more than expected to below the central bank's ceiling, giving comfort to officials trying to ensure consumer prices stay under control.
The so-called core gauge, which strips out volatile elements like energy and food, fell to 1.9% in May, down from 2.2% the previous month. Headline inflation also slowed markedly, coming in at 2.2%, matching the median estimate in a Bloomberg survey.
On the month, overall prices increased 0.3% because of higher costs for housing rentals, package holidays and several food products. Air transport, holiday home accommodation, heating oil and diesel all produced a downward effect.
This is the last reading of inflation before Swiss National Bank officials meet for their quarterly interest-rate decision on June 22. Economists predict a further 25 basis-point hike from the current level of 1.5%.
Receding price pressures have seen the SNB's main concern shift from headline inflation to increases spreading through the economy.
Source : Bloomberg
