Safe haven Switzerland felt the chill touch of the eurozone's woes between April and June as the crisis sent its economy into a shock reverse, official figures showed yesterday.
Switzerland's output shrank 0.1 per cent in the second quarter, disappointing hopes of modest growth. The economy's performance between January and March was also revised down from earlier estimates.
The nation is feeling the squeeze from lower exports as its currency is inflated by the influx of billions seeking shelter from the euro in the Swiss franc.
The figures supported the case for the Swiss National Bank (SNB) to maintain the €1.20 cap on the "Swissie" it imposed a year ago. This eventually cost former SNB boss Philipp Hildebrand his job, when it emerged his wife had made big profits on currency dealing just weeks before the move.
The SNB, which holds its next rate decision next week, has predicted the economy will slow significantly in the second half, forecasting growth of 1.5 per cent for the year overall.