The GBP/CHF currency pair has attempted a rebound from a 1 1/2-week low of 1.0612 on Thursday ahead of the outcome of the Bank of England’s and the Swiss National Bank’s policy meetings.
The BoE is expected to leave its benchmark interest rate intact at 3.75% at its June 18th meeting.
Policy makers have taken a cautious stance on whether higher energy prices linked to the Iran conflict could lead to longer-lasting inflation pressures.
UK inflation has remained above the BoE’s 2% target for most of the past five years, with the central bank previously warning inflation could surge above 3.5% later in 2026.
Figures from the UK Office for National Statistics showed that headline CPI had risen 2.8% year-on-year in May, matching April’s pace. Core CPI edged up to 2.6% year-on-year from 2.5% in the prior month. These latest readings may give the BoE more room to maintain steady interest rates.
Meanwhile, the Swiss National Bank is expected to keep its policy rate without change at 0% at its June 18th meeting.
Low inflation has given policy makers room to stay cautious. Annual consumer price inflation in Switzerland held at 0.6% in May. While this print matched the prior reading and represented the highest level since late 2024, it fell short of the 0.8% consensus estimate, prompting market participants to reassess the likelihood of a near-term SNB rate hike.
The SNB’s latest projections point to average inflation of 0.5% in 2026 and 2027, and of 0.6% in 2028. This suggests that policy makers see little need for tighter policy.
The SNB has also reaffirmed its readiness to intervene in the Forex market if needed.
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