In January, Swiss consumer price inflation reached 1.6%, its highest level since 2008 and closer to the 2% upper limit of the Swiss National Bank’s definition of price stability.
Prices increased by 0.2% in December due to higher prices for gas, hotel rooms, and used cars. This was offset by falling prices for private transportation and clothing and footwear during seasonal sales, according to official statistics.
Thomas Jordan, Chairman of the SNB, stated last month that central bankers needed to be serious about a global inflation surge. However, the SNB saw Swiss inflation at its peak.
He remained true to the SNB forecast of Swiss inflation at 1% in this year’s.
“Inflation in Switzerland was higher than expected in January,” Capital Economics analyst Michael Tran stated in a note.
He said, “In any event, January is likely the peak” and that the headline rate would fall below 1.0% in the following months.
To curb the strength of the safe-haven Swiss Franc, the SNB used a -0.75% rate policy and currency intervention over many years.
“While the SNB isn’t in trouble on the inflation front,” Tran stated, predicting that the SNB would raise policy rates to zero by 2023.
