Swiss Central Bank Keeps Close Watch on Food Price Pressures

The Swiss National Bank (SNB) is keeping a close eye on the impact of hot and dry weather on food prices, but so far, it's only played a limited role in Switzerland's rising inflation. SNB Chairman Martin Schlegel said that unusually hot and particularly dry summer has affected some food prices.

Despite the concerns about reduced harvests and lower water levels affecting major transport routes, Schlegel believes the recent rise in inflation was driven largely by higher petroleum product prices. He stated that 'the increase in inflation has been driven almost entirely by petroleum products.'

The SNB kept its benchmark interest rate unchanged at 0% on Thursday, despite other central banks raising borrowing costs to combat inflation pressures linked to energy prices.