Bern: Inflation in Switzerland unexpectedly rose in February, mainly due to a rise in airfares, fares and energy prices, according to data released by the federal statistics office on Monday.

Last month, consumer prices rose 3.4% year over year, exceeding Bloomberg's average estimate, which called for a slower rate of 3.1%.

The media outlet reported that the country's central bank would need to tighten its monetary policy as a result of the February price hike, which was reflected in rising prices for airfare, package holidays, fares and gasoline.

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According to the data, Switzerland's core inflation—which excludes energy and food prices—increased for the third month in a row and reached 2.4%.

While Switzerland has managed to maintain the lowest pace of inflation among major European economies, persistent price increases will force the central bank to hike rates as underlying inflation dynamics are "stronger than the SNB is prepared to bear". is," said Thomas Jordan, president of the Swiss National Bank.

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Swiss inflation rose 3.3% year-on-year in January, mainly due to rising gas and electricity costs. The rate was also higher than the 2.9% economists predicted and the highest since August 2022.

The cost of housing and energy increased by 5.1%, while the cost of public transportation increased by 4.7%. In January alone, the price of gas rose 40.3% year-on-year, while the price of electricity rose 25.5%.

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The central bank is also concerned that businesses are now more likely to pass on price increases to customers. Utility companies raised their rates at the start of the year, increasing costs to Swiss households. Previously, Swiss state regulator ELCOM predicted that consumers would pay an average of 27% extra for electricity.