Swiss CPI Rises At Fastest Pace In 15 Years

Swiss inflation rose 2.9% on an annualized basis in May, accelerating from 2.3% the month prior, which was the fastest pace in 15 years. Consumer prices gain 0.8% from April marking the largest monthly gain since October 2007. Oil prices reaching a record high of $135 per barrel has started to stoke inflation and diminish consumer’s purchasing power. Indeed, housing and utilities costs rose 2.3% on the month which accounts for 25% of the consumer price index. Inflation concerns are becoming the main focus for the Swiss National Bank, despite the economy growing at its slowest pace in three years. However, expectations are that the SNB will keep rates unchanged for the time being as fall out from the financial crisis continues to impact its largest banks and subsequently the economy.

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