Schlegel repeated the central bank's mantra that increases from the SNB's current 1.75% level could not be ruled out when he spoke with Schweiz am Wochenende.
But in its most recent forecasts, the central bank said it expects price rises to be 2.2% this year and next year before ebbing to 2.1% in 2025. "Despite the recent decline in inflation, underlying inflationary pressures have continued to rise," he said. "There is still a risk of inflation becoming entrenched above 2% in the medium term, i.e. above the range we equate with price stability."
Schlegel said long term demographic factors like a shrinking working age population pointed to higher interest rates in future even after the current bout of inflation was defeated.
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