(Recasts throughout, adding analysts, currency reaction, SNB no comment)

ZURICH, Feb 13 (Reuters) - Swiss inflation eased to its lowest level in nearly two and a half years in January, official data showed on Tuesday, feeding expectations that the Swiss National Bank could cut interest rates in March.

Consumer prices rose by 1.3% in January compared with the same month last year, the lowest annual increase since October 2021, according to

data

from the Federal Statistical Office.

The figure undershot the consensus forecast of a Reuters analysts' poll that inflation would be unchanged from December's 1.7% rate, and was the eighth month in a row where it fell within the Swiss central bank's target range of 0% to 2%.

The SNB, which is due to announce its next interest rate decision on March 21, declined to comment on the data.

"This was a really big downward surprise," said Karsten Junius, an economist at J.Safra Sarasin.

"The SNB is unlikely to declare victory yet as domestic products increased by 0.6% month-on-month and 2.0% year-on-year," he said. "That said, the huge downward surprise increases the probability of a rate cut in March."

EFG International said Swiss inflation was already much lower than the SNB's own projections for the first quarter of 2024, and was striking because the downturn came despite an increase in Swiss sales tax introduced in January.

"This gives more room for the SNB to consider an easing of monetary policy already at its March meeting," said EFG economist GianLuigi Mandruzzato.

The Swiss franc weakened on the data in anticipation of the SNB cutting its rates from the current level of 1.75%.

Markets currently have priced in a 54% likelihood that the SNB will cut rates in March.

The franc declined 0.5% to 0.8797 per dollar, its weakest level since Dec. 11, and by 0.4% to 0.9477 per euro , the weakest level since Dec. 19. (Writing by John Revill, editing by Dave Graham)