ZURICH (Reuters) – SNB Governing Council member Andrea Maechler said on Wednesday that inflation in Switzerland has proven to be more broad-based and more persistent than first thought, reiterating his The central bank’s pledge to curb rising prices.
Inflation was initially sparked by higher oil prices, supply chain disruptions and tight labor markets in the wake of the coronavirus pandemic, but has now spread to other parts of the economy, Maechler said.
“Now we have significantly higher inflation rates, and more persistently than we initially expected,” she said at an event at the International Institute for Management Development (IMD) in Lausanne.
“Over the past
It has become easier for companies to raise prices, adds Maechler .
Swiss inflation was 2.2% in May and has been above the SNB’s 0-2% target range since February 2022. The central bank last week raised interest rates to the highest level in 10 years and signaled further hikes are likely.
Markets expect the SNB to raise interest rates from the current level of 1.2022% raised to 2%.
“How much more do interest rates need to go up to curb the persistent inflation we’re seeing? It’s a $10 million dollar question, I doesn’t answer that question,” Maechler said.
Nonetheless, in her last public appearance before leaving the SNB, she said the central bank was determined to tackle inflation.
“Excessive inflation is poison to society. It undermines trust in money and the foundations of healthy economic growth,” Mechler said .
“Ultimately you lose trust and predictability and everyone loses.”
