Surprisingly, Switzerland raises interest rates, the franc jumps

A commitment, the latter to the possible sale of currencies, which also represents a novelty after so many years of purchases. Annual inflation in Switzerland reached 2.9% in May and, according to the SNB, “will remain likely short term” emphasized.

In Switzerland, a good part of the question revolves around this adjective “difficult”. In large economic areas such as the USA and Europe, inflation is now much higher, between 8% and 9%, but the Swiss Confederation has historically tended to have inflation between zero and 2%, and therefore economic balances. However, many Swiss already consider the current level to be extremely high.

The SNB has raised the average annual inflation rates expected in Switzerland and now sets them at 2.8% in 2022, 1.9% in 2023 and 1.6% in 2024. The SNB continues to expect growth GDP of around 2.5% for Swiss economic growth. this year with low unemployment. Mortgage lending and house prices have continued to rise in recent quarters and as such, the Swiss central bank “will continue to closely monitor developments in the mortgage and real estate markets”.

The leap of the franc

On the news on Swiss franc it gained between 1% and 2% against the euro and the US dollar. In the morning, the euro quoted between 1.01 and 1.02 francs and the American currency around 0.98 francs.

BoE also raises interest rates

London is also raising interest rates. The Bank of England’s monetary policy committee raised interest rates to ensure monetary policy meets its 2% inflation target and to support growth and jobs. At the meeting, according to the statement, the BoE committee voted by a 6-3 majority to raise interest rates by 0.25 percentage point to 1.25%. The three members of the minority would have preferred to increase the rate by 0.5 percentage point to 1.5%.