The SNB's first rate rise slips to 2027 or 2028

The first interest rate rise in Switzerland has been postponed again. According to a Bloomberg survey of economists reported by Cash, expectations have shifted markedly further out compared with a few months ago.

Until recently some observers placed the first increase within 2026. Today the most optimistic forecast points to June 2027, while the majority of respondents expect early 2028. According to Bloomberg, the Swiss National Bank itself internally expects to keep its policy rate at 0.0 per cent until the end of 2027, with possible increases only thereafter.

The path to this point was rapid. Since 2024 the SNB, under the presidency of Martin Schlegel, has made six consecutive cuts, taking the policy rate from 1.75 per cent to 0.0 per cent. The last cut dates from 19 June 2025. Since then the central bank has left rates unchanged at four consecutive quarterly assessments.

What a prolonged zero rate means

Maxime Botteron of UBS considers a rise possible by June 2027, supported by stimulus from the eurozone. The reasoning behind the wait is the familiar one: with inflation below one per cent and gross domestic product growth below potential, a slightly expansionary monetary policy appears appropriate.

The argument holds in the short term, but a policy rate at zero for years has effects that do not appear in inflation statistics. Traditional saving yields nothing, which weighs particularly on pension funds and on those who live off returns. Cheap credit also tends to feed property prices, an issue already under scrutiny by Switzerland's supervisory authorities.

Then there is the question of room for manoeuvre. A central bank entering a slowdown with its rate already at zero has limited tools and must resort to less conventional interventions on the exchange rate or its balance sheet. That is why the prospect of a rise, in itself unwelcome news for borrowers, is also read as a sign of normalisation.

The next reference point comes on Friday with second-quarter 2026 growth figures: most analysts expect plus 0.3 per cent, against plus 0.4 in the first quarter. The SNB's next decision is set for 24 September.