Price pressures to keep central banks in hawkish mood

Consumer price inflation has continued to accelerate in Switzerland and across the Nordics, adding to the pressure on central banks to tighten monetary policy more aggressively. In Switzerland, headline inflation reached 3.5% in August, which is low by European standards but the highest rate the country itself has experienced since 1993. And with the central bank’s policy rate still negative at -0.25%, there is a clear case for a large rate hike next week. We expect another 50bp increase.