Switzerland did not escape the threat of inflation after consumer prices reportedly rose to a nearly 14 -year high in May.
The annual consumer price index (CPI) jumped 2.9% from the previous year following higher fuel and food costs.
The reading is the highest rise in Swiss inflation since September 2008, and is the fourth consecutive month prices have surpassed the central bank’s target for price stability.
On a monthly basis, consumer prices rose to 0.7% from 0.4% recorded the previous month.
The head of the Swiss Central Bank (SNB), Thomas Jordan had warned last month that the central bank is watching inflation closely and is ready to act if inflation is strong.
The SNB and the Central Bank of Japan (BOJ) are the other two major central banks that are still lagging behind in fighting inflation.
However, as price pressures begin to increase and become more pronounced and persistent, they may not be able to last too long with loose monetary policy.
The surge displayed by the Swiss Franc following the publication of this data, indicates that investors can feel that the SNB will start acting.
