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Rising fuel costs drive inflation higher

Higher fuel prices are pushing up inflation Keystone

Rising fuel costs have driven inflation in Switzerland to a four-year high. But the economy is reportedly expanding at the fastest rate for 10 years.

Last month the consumer price index rose by 1.9 per cent – the highest rate since the end of 1995.

The federal statistics office said on Wednesday that the rise was mainly due to hikes in petrol and heating oil prices. Inflation would have only risen by 0.7 per cent if they had not been taken into account.

The index for consumer prices also rose in June by 0.4 per cent to 100.4 points.

However, on a more optimistic note, Switzerland’s leading bank, UBS, says the economy is expanding at a rate not seen for 10 years. Following a survey of 300 companies, the bank said it expected Gross Domestic Product to rise by 3.9 per cent this year.

It said the June survey found that the upturn in the second quarter was much stronger than predicted in March. UBS said analysts were primarily surprised by the strength of domestic demand, particularly in retail trade and the construction industry.

swissinfo with agencies

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR

SWI - a branch of Swiss Broadcasting Corporation SRG SSR