The UBS Swiss consumption indicator slipped to 0.766 in July from a revised reading of 0.951 in the previous month, and the data reinforces a weakening outlook for future growth as the economy faces its worst economic downturn in over a quarter century. At the same time, a report by the Federal Statistics Office showed payrolls slumped 0.4% in the second-quarter to an annual rate of 3.945M from 3.959M in the previous year, and businesses may continue to scale back on production and employment in an effort to weather the downturn in global trade. As the Swiss National Bank expects economic activity to remain subdued in the following year and forecasts inflation to hold ‘very close to zero’ over the next two years, the central bank may continue to utilize policy tools beyond the interest rate in order to steer the ailing economy out of the recession.
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