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Inflation in Switzerland accelerated to the fastest pace in nearly three decades, hitting 3.4% in June.

The pace is up from 2.9% in May, and well above the Swiss National Bank’s 2% target. Based on the European Union-harmonized measure, it was at 3.2%, compared with 8.6% in the surrounding euro area.

Russia’s war with Ukraine has been a “significant factor” in the acceleration of prices in Switzerland, as are persistent supply-chain bottlenecks, according to the SNB.

The development comes two weeks after the central bank unexpectedly raised its monetary policy rates to -0.25% in order to help counter increased inflationary pressures. SNB chief Thomas Jordan said then that inflationary pressures remain high and officials may have to hike again.

The central bank’s June forecast for inflation is 2.8% this year, 1.9% in 2023 and 1.6% in 2024.

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