Swiss inflation returns to positive territory in June

ZURICH, July 3 (Reuters) - Swiss inflation returned to positive territory in June, government data showed on Thursday, leading analysts to believe that further rate cuts by the Swiss National Bank were now off the table.

Consumer prices rose 0.1% in June compared with a year earlier, according to figures from the Federal Statistics Office, as price rises for domestic products offset cheaper imports.

It was a turnaround from the 0.1% decline in May, and meant inflation returned to the Swiss National Bank's price stability target range of increases annually of 0-2%.

Compared with May, Swiss prices were 0.2% higher in June, due to rising prices for international holidays, hotels as well as food and drink.

The figures are likely to please the SNB, which last month cut its interest rate to zero in a move designed to weaken the Swiss franc. The rise in the safe-haven currency has been a factor in low Swiss inflation by making imports cheaper.

The SNB declined to comment on the latest inflation figures.

UBS economist Alessandro Bee said the data would reassure the central bank that it had made the right decision in June to cut rates but refrain from negative rates.

"It also supports our forecast of the SNB not cutting rates in the second half of the year," Bee said.

J.Safra Sarasin economist Karsten Junius expects Swiss inflation to tick higher during the rest of the year due to more expensive food prices and rising wages.

The latest data "doesn't change anything for the SNB but validates its hesitancy to go negative at the last meeting," Junius said.

"It also makes another rate cut in September not very likely," added Junius, who expects the SNB to keep its policy rate at zero until the end of 2026.