Swiss Consumption Indicator Falls Lower, Fueling Recessionary Fears

The UBS consumption indicator fell to 1.62 from a revised reading of 1.86 in July, which suggests that economic activity may weaken further as higher inflation continues to sap purchasing power for consumers. The growth outlook for Switzerland has clearly weakened throughout the second half of the year, and market participants have already raised bets that the economy will slip into a recession by 2009 as Germany, the largest economy in Europe, is on the brink of a recession.