Swiss consumer spending seen rising in H2-UBS

Thursday, 30 September 2010 05:24 - - {{hitsCtrl.values.hits}}

ZURICH, (Reuters) - The UBS consumption index for Switzerland continued to rise in August to its highest level in over two years, leaving the bank expecting a clear increase in consumer spending in the second half of 2010. The indicator, based on five subcomponents measuring consumer behaviour, rose to 1.95 in August from 1.88 the previous month. The number for July was revised up from 1.86. “Low interest rates and an improvement in the labour market, as well as the ongoing increase in the permanent resident population, should continue to support private consumption,” UBS said in a statement on Tuesday. The number of new car registrations was particularly strong, UBS said, with 11.9 percent more cars registered in August than a year earlier. Switzerland emerged from the global downturn much less bruised than other countries in Europe, with its downturn cushioned by robust private consumption. While the UBS indicator forecasts an increase in private consumption in the latter half of 2010, this stands in contrast to several indicators, such as the KOF economic barometer, which have predicted a slowdown in economic growth in the latter months of this year. At its monetary policy review on Sept. 16, the Swiss National Bank kept its interest rate target ultra low and predicted a significant slowdown in growth, given the strength of the Swiss franc and a cooling of the global economy. The SNB raised its growth forecast for 2010 to around 2.5 percent. But it said downside risks to the economy predominated and it revised its inflation forecasts down sharply, seeing price rises below its 2 percent stability threshold into 2013.