Swiss inflation accelerates faster than expected in April

SWISS annual inflation in April accelerated faster than expected to 1.4 per cent from 1 per cent the previous month, data from the Federal Statistics Office showed on Thursday (May 2).

The inflation reading outpaced the 1.1 per cent rate forecast by a Reuters poll of economists, and the Swiss franc gained on the euro and the US dollar following the data’s publication.

Month on month, prices in Switzerland rose 0.3 per cent, pushed up by higher costs for package holidays, air transport, furniture and furnishings, as well as petrol, the figures showed.

The Reuters poll had forecast a monthly increase of 0.1 per cent.

Still, April was the 11th month in a row the rate remained within the Swiss National Bank’s 0 to 2 per cent target range. That recent decline in inflation allowed the SNB in March to become the first major central bank to cut rates in the current cycle.

SNB chairman Thomas Jordan last week said the central bank had brought inflation under control, with the bank forecasting price rises to be within its target band for the next few years.

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Still, he warned against complacency, saying the SNB stood ready to adjust its monetary policy if necessary.

“In the current environment uncertainty remains elevated, and new shocks can occur at any time,” Jordan told the SNB’s shareholders at their general meeting. REUTERS