The business week in review

Inflation rate rose to a five year high this week prompting concern that the economy was overheating, and the government revised downwards expectations of how much it expected to earn from the sale of mobile phone licences.

The Swiss National Bank said there was no cause for alarm even though the inflation rate is now pushing at the limits of what the bank regards as price stability. It said that the increase was a temporary surge due to the high cost of fuel and that the inflation rate would stabilise along with oil prices.

The Swiss franc retreated against the dollar, falling to a 10-week low of $1.71. The franc was dragged down by the euro, which plummeted against the dollar after better than expected economic data from the United States.

The government revised its expectations of how much it expected to earn from the sale of Switzerland’s four third generation mobile phone licences.

The Federal Office for Communication said it expected the auction to net between SFr3 and SFr6 billion ($1.75 and $3.5 billion). Just a few months ago it estimated earnings at up to SFr10 billion.

But it said a sluggish start to Germany’s auction marked a return to earth for the mobile communications sector.

The country’s largest financial group, UBS, announced it was planning a share flotation to raise capital for its acquisition of US brokerage, Paine Webber. It will ask shareholders to approve a share capital increase at an extraordinary shareholder meeting on September 7.

UBS and Paine Webber announced their merger agreement on July 12 in a deal that’s expected to make UBS one of the world’s leading asset managers.

The food giant, Nestlé, has continued its strategic concentration on its core activities. The Vevey-based company bought two mineral water companies in South Africa and sold off three factories in the US making frozen potato products.

Ciba Specialty chemicals became the latest in a long line of Swiss companies to list on Wall Street this week. The company says the move is intended to facilitate access to the US capital market and to expand the shareholder base.

swissinfo with agencies