UBS company survey: Ecology yes, but not regulated

When it comes to achieving environmental targets, companies also prefer instruments such as training, education and communication, as successfully achieved in Switzerland, for example, in the field of recycling of materials such as aluminum. Voluntary cooperative arrangements and environmental target agreements between companies are also frequently cited as preferred instruments. State interventions are most likely to be supported if they are implemented in the form of market-based instruments such as an incentive tax. Only a small proportion of companies consider subsidies and direct state interventions, such as regulations in the form of directives and bans, to be suitable for achieving ecological targets

Mixed prospects for the Swiss economy

UBS economists expect the Swiss economy to cool significantly this year and foresee GDP growth around 0.9 percent. The stronger Swiss franc in comparison to 2018 and the weaker global economy are holding back exports and investment. However, the domestic economy is supporting growth and preventing a hard landing.

If the European economy recovers in the second half of the year and US economic growth remains stable, the European Central Bank could well undertake an initial interest rate hike at the start of next year. This would also give the Swiss National Bank the opportunity to increase its prime rates. The UBS economists do not foresee positive prime rates in Switzerland before 2021.

However, if the European economy does not recover as well as expected or if the US Federal Reserve reduces its interest rates, Swiss prime rates could remain negative over a much longer period. This does not represent the baseline scenario of UBS, but even so, investors must not ignore the possibility of such a development.