After five interest rate increases, the Swiss National Bank SNB has decided not to raise the key interest rate further. This remains unchanged at 1.75 percent. However, rents depend on the reference interest rate – and this is likely to rise again in the future, regardless of further monetary policy decisions. Thomas Jordan, President of the Swiss National Bank, talks about the inflation forecast.
Thomas Jordan
National Bank President
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Thomas J. Jordan was born in Biel in 1963. He studied economics and business administration at the University of Bern. He was elected President of the SNB Board of Directors by the Federal Council in 2012.
SRF News: Is there a possibility that you will raise interest rates again in December and that the next interest rate hammer will simply hit tenants a little later?
Thomas Jordan: It always depends on how badly mortgage interest rates are affected by this monetary policy decision. We have seen longer-term rates rise relatively quickly. And recently the short-term ones have also increased, although not to the same level.
Energy prices are likely to rise even more in winter, which will further fuel inflation. How worried is that for you?
Of course that has a certain influence. According to our inflation forecast, we are now at around 1.6 percent. This number was previously slightly higher. We assume that this is the low point at the moment and that inflation will rise again to a maximum of around 2.2 percent.
Energy and rents are the two main drivers of inflation.
This difference is due to two factors: One is energy. Electricity will become more expensive again in January and oil has already become slightly more expensive. The other thing is the rents. These are now coming in November. These are the two main drivers of inflation.
At the moment, prices are also rising for many domestic goods, regardless of energy and rents. Food and health insurance premiums are becoming more expensive – the perceived inflation is high. What do you say to people who are struggling to make ends meet in this situation?
We know that inflation is not a good thing and makes life particularly difficult for people with low incomes. That is why price stability is the goal of the National Bank. We are doing everything we can to ensure low inflation.
We are in a comparatively good situation in Switzerland.
In international comparison, we are of course in a much better position: inflation here was a maximum of 3.5 percent, but abroad it was up to 10 percent. This shows that we are still in a comparatively good situation in Switzerland. But it is our job to keep inflation below 2 percent if possible. And we are setting our monetary policy to achieve this goal.
The interview was conducted by Jan Baumann.