Neuchatel, Switzerland, Feb. 2 (Bloomberg) -- Consumer pricesin Switzerland unexpectedly fell in January, as the cost ofheating oil and gasoline dropped, making an interest rate cutmore likely in coming months. Prices dropped 0.1 percent last month from the month before,the Federal Statistics Office said in a statement handed out inparliament. Eight economists surveyed by Bloomberg News hadpredicted an increase of 0.2 percent. The easing of inflation is a further sign the Swiss economy isslowing, and may make the Swiss National Bank lean moretoward cutting interest rates. SNB Chief Economist Georg Richearlier this week said a rate cut was not on the agenda becausethere's no evidence the Swiss economy is slowing as much asthe U.S. economy. ``This makes it more easy for the SNB to argue an interest ratecut,'' said Joachim Schuetz, a senior economist at Credit SuisseFirst Boston. ``Inflation is definitively no problem with an averageof 1.5 percent this year, even if we're allowing for a peak in May.'' The Swiss National Bank at the start of last year introduced pricestability -- defined as consumer price inflation of 2 percent or less-- as the main objective of monetary policy. As inflationaccelerated amid soaring oil prices, a weak franc and a boomingeconomy, the bank's governors added a total of 175 basis pointsto its target range for the benchmark London interbank offer rate. The target range for 3-month Libor stands at 3 to 4 percent. Liborfell to 3.398 percent yesterday, from 3.457 on Tuesday. Repocontracts, which the bank uses to steer monetary policy, haveedged up in January, with a one-week contract yielding 3.32percent yesterday, seven basis points higher than on Jan. 4. The Federal Reserve Bank Wednesday cut the U.S. benchmarkrates 50 basis points, the second such cut in a month, afterrecent economic reports showed U.S. growth slowing more thanexpected. Swiss economic growth has also been slowing since the secondhalf of 2000. Gross domestic product is now expected to expand2 to 2.5 percent this year, down from about 3.3 percent last year.Inflation reached a high of 1.9 percent in November, fueled by atripling of oil prices and a strong dollar. Today's report showed prices rose 1.3 percent from January ayear ago, less than the 1.6 percent economists expected. Theprice for heating oil fell 18 percent from December, while gasolinewas 7.6 percent cheaper. The price of beef fell 6.2 percent,following renewed fears about that mad cow disease maytransmit to humans. Schuetz, who had predicted a rise in consumer prices inJanuary, said rising health costs and apartment rents would stillpush up inflation in coming months. Still, average inflation maybe lower this year than last. Prices had risen 1.6 percent in2000, at double the rate from 1999.