Switzerland has become the latest country to be hit by increased fuel and food prices, as consumer price inflation rose to its highest level in nearly 14 years, the Swiss government indicated on June 2.
The consumer price index rose 0.7 percent from the previous month.
Housing and energy rose 4.3 percent compared to 0.6 percent last month, while transport was up 10.3 percent from April’s 0.9 percent. Meanwhile, heating oil was up 5.1 percent month-over-month and 81.9 percent from the same month a year ago.
Many food products also saw price increases, as did alcoholic beverages, clothing, and footwear.
The latest figures mark the fourth successive month in which prices have risen above the central bank’s target of an annual inflation rate of zero to 2 percent.
On May 31, officials said the Swiss National Bank would need to act if faster inflation were to persist in the long term.
Zurbruegg also said he doesn’t expect the Swiss economy to slow further but noted that the central bank will consider how persistent higher Swiss inflation is when it decides its future monetary policy next month.
He also noted that there has so far not been a push for higher wages from the Swiss people, unlike in the United States or Europe.
“Because if we got into that kind of wage-price spiral, that would obviously lead to a significant increase in the persistence of high inflation rates,” he said.
“Another important point is inflation expectations. If we want to avoid this situation, of self-reinforcing processes, it is important what consumers think about prices in five years, in ten years,” Zurbruegg said. “Here, we still see relatively little movement in Switzerland.”
UBS economist Alessandro Bee said he expects the Swiss central bank to wait until September to start raising rates after it has assessed the effects of rate increases by the European Central Bank, which he expects in July.
