In November 2019 before the pandemic hit Switzerland, Thomas Jordan, the head of Switzerland’s central bank was warning that the bank might need to take interest rates below the unusually low -0.75% rate that prevailed at the time. Since then the rate has risen by 2.5% after a 0.25 percentage point rise announced on 22 June 2023. This has not only pushed up central bank interest rates but largely taken QE off the table – QE adds fuel to the inflationary fire. And the large gap of 3.7% between the central bank interest rate (5%) and annual inflation is not encouraging. With a central bank interest rate of 1.75% and inflation of 2.3% (year ended 31 May 2023), Switzerland has a stronger chance of getting ahead of inflation than places like the UK.

Source: Le News June 23, 2023 16:06 UTC