SNB chair Schlegel signals readiness to act as Swiss inflation rises

Swiss National Bank Chairman Martin Schlegel said the central bank would not hesitate to change its monetary policy if price stability is put at risk. In an interview with Handelszeitung, he said the SNB had been caught off guard by the rise in inflation.

Consumer price inflation reached 1.5 percent year-on-year in October, the highest in nearly three years. Schlegel said the figure came in above the bank’s own expectations and has risen since the last policy assessment.

Fuel and heating drive the rise

The increase was driven mainly by fuel and heating costs. Clothing, food and footwear also rose.

Schlegel said no significant second-round effects on wages and rents have appeared so far. He added that such effects cannot be ruled out in future.

Rate hike bets build

The SNB targets annual inflation between 0 and 2 percent. Its policy rate stands at 0 percent, the lowest among major central banks.

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In our market data, USD/CHF was at 0.8158 as of 00:47 GMT on 5 November, its lowest in 31 days.

Source: Swiss National Bank  |  Data: Swissquote