(Bloomberg) -- Swiss inflation slowed more than expected in August, supporting the case for another interest-rate cut.

Consumer prices rose 1.1% from a year ago, the statistics office said Tuesday. That’s weaker than the 1.2% median estimate in a Bloomberg survey and compares with 1.3% in July.

Costs of transport, heating oil and international package holidays all fell, offsetting higher rents and clothing and footwear prices, according to a statement. The core reading — excluding fresh and seasonal products as well as energy — held at 1.1%.

The Swiss National Bank kicked off monetary easing earlier than global peers and has lowered rates at both of this year’s decisions. It will probably deliver a third reduction when officials meet at the end of this month.

That outlook is supported by slow inflation and a strong Swiss currency. Analysts are particularly wary of a potential boost to the franc when the European Central Bank — which meets twice as often as Swiss policymakers — catches up with SNB rate cuts.

Officials at Switzerland’s central bank predict consumer-price growth will average 1.5% in the third quarter — mainly driven by domestic services. It’s then expected to slow, reaching 1% in 2026.

What Bloomberg Economics Says...

“Overall, headline inflation seems on track to average only 1.2% in 3Q24, down from 1.4% in 2Q24 and substantially below the SNB’s latest forecast for 1.5%. We expect this downside surprise to inflation, combined with upside pressures on the franc, will prompt the central bank to cut rates again by 25 basis points, to 1%, at its next meeting in September.”

—Maeva Cousin, senior economist. For full react, click here

The country has one of Europe’s lowest inflation rates. Data from the neighboring euro area showed price growth there slowed to a three-year low of 2.2% in August. Based on the European Union’s harmonized measure, the Swiss saw an advance of 1% in the period.

A separate statement from the government showed that gross domestic product adjusted for major sports events rose 0.5% in the second quarter, confirming a flash reading last month.

“This result was slightly above average, driven by the strong expansion of the chemical and pharmaceutical industry,” the State Secretariat for Economic Affairs said. “Growth in the other sectors was mixed, reflecting weak domestic demand.”

--With assistance from Joel Rinneby and Kristian Siedenburg.

(Updates with BE comment after sixth paragraph)