Table of Contents

• The Bank of England

• The Swiss National Bank

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The Bank of England

The Bank of England kept its policy rate at 4.25%, with six of nine policymakers preferring to hold and three voting for a 25-basis-point reduction. Officials cited sluggish GDP, a loosening labor market, and moderating wage growth as signs that slack is emerging, while global risks, from Middle East tensions to U.S. tariffs, could push inflation higher. With consumer prices running at 3.4%, well above the 2% target, the BoE signaled two-sided risks and stressed that rates are not on a predetermined path, though markets anticipate the first cut in August.

The Swiss National Bank

The Swiss National Bank reduced its policy rate by 25 basis points to 0%, responding to weak price pressures and deflationary trends after consumer prices fell 0.1% in May. Officials noted that while inflation has eased, singular deflation readings aren’t sufficient to prompt further cuts, and they will monitor developments, particularly the strong Swiss franc, which depresses import costs. The SNB revised its inflation forecasts down to 0.2% for 2025 and 0.5% for 2026, and emphasized that moving into negative territory would be a significant step taken only with caution. Economists expect the SNB could cut rates to -0.25% later this year amid ongoing global uncertainties, though negative rates carry risks for savers and banks.

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