ZURICH, Oct 3 Reuters Swiss inflation has fallen to its lowest level in more than three years, government data showed on Thursday, prompting analysts to say more interest rate cuts by the Swiss National Bank were virtually certain.

Swiss consumer prices rose by 0.8 in September compared with the same month a year earlier, data from the Federal Statistics Office said, the weakest increase since July 2021.

Monthonmonth prices fell by 0.3, due to cheaper petrol, accommodation and holidays, the FSO said.

In response to weak inflation, the SNB last week trimmed interest rates to 1.0, its third cut this year and indicated more reductions were on the way.

The central bank39;s new chairman Martin Schlegel has prioritised price stability keeping inflation within a band of 02 and has said inflation risks were now tilted more towards the downside.

In his first public appearance since taking charge, Schlegel on Tuesday also said the SNB was not ruling out taking interest rates into negative territory.

The SNB declined to comment on Thursday about the latest inflation figures.

Markets gave an 82 probability for a 25 basis point cut by the SNB at its next meeting in December, and an 18 probability for a 50 basis point cut.

Karsten Junius, chief economist at J.Safra Sarasin, said inflation dynamics in Switzerland remain alarmingly weak with falling prices for imports while domestic inflation was driven mainly by rent increases.

Today39;s figures shows that interest rate cuts…