SNB Would Lift Rates If Sees Wage Spiral Risk, Jordan Tells NZZ
Swiss National Bank Governing Board member Thomas Jordan said the bank would raise borrowing costs if it saw the risk of a wage-price spiral developing, NZZ am Sonntag reported, citing an interview.
Unions “must be aware'' that trying to compensate for “unpleasantly high'' inflation by increasing salaries would fuel inflation, Jordan is quoted as saying in the interview.
Jordan said interest rates don't need to be changed for now because inflation is likely to drop below the bank's 2 percent limit, assuming oil prices stabilize, Jordan told NZZ am Sonntag pay day loans.
Slowing growth is also likely to damp inflation, he said. The SNB expects to see a “distinct slowdown'' rather than a recession in Switzerland, Jordan is quoted as saying. Overall growth is likely to be 1.5 percent to 2 percent in 2008 and recover in the course of 2009, Jordan said.