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By Emma Thomasson
ZURICH, Nov 10 (Reuters) - Swiss consumer confidence fell to its lowest level in five years in October as concerns grew about personal finances and job security, data showed, bolstering views that the central bank will keep cutting interest rates.
The consumer sentiment index slipped to -27 points from -17 points in July, the State Secretariat for Economic Affairs (SECO) said. This was well below a long-term average of about -8 points but marked a smaller fall than in the last two quarters.
It was the lowest level since October 2003 but well off the trough of -39 hit in October 2002, the SECO noted.
"It's not as bad as expected but that is only due to the backward-looking components. The forward-looking components show that things will get much gloomier because we are only just at the start of this recession," said Alessandro Bee, an analyst at Sarasin.
Economists polled by Reuters had forecast the index would come in at an average of -33 points.
Saara Tuuli of 4Cast Limited said the weakening Swiss consumer mood was in line with falls across the euro zone and was starting to weigh on spending data. This was likely to prompt the Swiss National Bank to keep cutting rates.
"After last week's surprise cut, we expect the SNB to cut rates by a further 50 basis points in December," she said.
The SNB cut interest rates by 50 basis points last week, the the second cut within a month, and the market is pricing in another move when the bank reviews rates in December.
Economy Minister Doris Leuthard said in a weekend interview that the economy could enter a recession, but jobless rates should not rocket.
"We could fall into a recession, with negative growth for two successive quarters," she told the SonntagsBlick newspaper. "But I am still confident about the labour market. We still do not think there will be a rapid increase in unemployment numbers, partly because immigration will fall off."
The SECO said only views about the general economic situation for the last year worsened dramatically in October, while views about personal finances for the past and coming 12 months were almost unchanged.
However, almost all the other indicators which do not form part of the overall index have worsened, in particular views on the outlook for the economy in the next year and security of jobs, while prices expectations have been revised down.
The index is conducted on a quarterly basis and is compiled from a survey of more than 1,000 households. (Additional reporting by Jason Rhodes; editing by David Stamp)