ZURICH – Swiss consumer price inflation touched 1.6% in January, the highest level since late 2008, as it moved closer to the 2% upper band of the Swiss National Bank’s definition of price stability.
Prices rose by 0.2% from December as gas, hotel stays and used cars became more expensive, offsetting falling prices for private transport and for clothing and footwear amid seasonal sales, official statistics showed.
SNB Chairman Thomas Jordan said last month that central banks needed to take a global surge in inflation seriously, but that the SNB saw Swiss inflation near its peak.
He stuck to the SNB’s forecast that Swiss inflation would be around 1% this year.
“Inflation was stronger than expected in Switzerland in January, although the upward surprise was not in the same league as that seen in the euro zone and Swiss inflation is still consistent with the SNB’s definition of price stability,” Capital Economics analyst Michael Tran said in a note.
“In any case, January is likely to be the peak and we think that the headline rate will fall back below 1.0% over the coming months.” he added.
The SNB has used a -0.75% policy rate and currency intervention for years to curb the safe-haven Swiss franc’s strength.
“While there isn’t much to trouble the SNB on the inflation front, the shift in the monetary backdrop has brought Swiss rate hikes onto the horizon,” Tran said, forecasting the SNB could raise the policy rates back to zero by the end of 2023.