Swiss central bank chief warns inflation could increase

Chairman Thomas Jordan said that a steeper price rise could mean higher inflation in the future, as Swiss National Bank SNB won't accept Swiss inflation above its target of 0 -- 2%.

Jordan said the SNB's definition of price stability was different from the European Central Bank's symmetric inflation target of 2%.

Jordan told an event in Zurich that the Swiss September reading of 3.3% was still too high, although inflation in Switzerland is lower than a forecast of 10% in the euro zone last month.

Jordan told the Swiss business magazine Bilanz that 3% of us is no longer price stability. He said that he was embargoed for wider release until Friday.

He said it was difficult to control the inflation rate if you go up and find yourself in a situation that is completely different.

In recent months, the SNB has shifted its focus from stemming the rise of the Swiss franc to tackling inflation.

The policy rate was raised by the central bank by 0.75% last month after it ended its era of negative interest rates.

Jordan said that it is important for us to bring inflation back below 2% in the medium term.

We have taken measures. He said that the nominal appreciation of the currency had reduced the effect of imported price rises from more expensive energy and food, and the franc was able to appreciate when we adjusted interest rates.

The SNB has no longer referred to the franc as overvalued, although the central bank did not want to give a daily commentary on the currency's valuation.

If the franc increased too much in value, it would intervene in the markets, but Jordan wouldn't give a level at which the SNB would launch currency interventions to dampen its rise.