It is only now, ten years later, that they are taking steps to move away from these measures. What is everyone afraid of? That growth will remain rather low and unstable. Indeed, after a long period of crises and stagnation, the global economy is entering a new cycle. But what is the aftermath? First. A higher debt load than in 2007. In developed economies, the primary problem is government debt, whereas many countries with emerging markets struggle with corporate debt. Second. Developed economies are contending with exceedingly low inflation and even deflation. Moreover, there are bubbles in individual markets that threaten to grow owing, among other things, to the effects of long-term soft monetary policy. Fourth. Low growth rates in productivity and investment. This not only limits opportunities for development but also hampers growth due to increased debt burden. Fifth. Developed countries are seeing increased inequality in the face of stagnating middle-class incomes, a trend observed over the past 30–40 years and often labelled the result of globalisation. It is clear, however, that unequal access to the opportunities afforded by new technologies also played a role. In this regard, the digital revolution and the new wave of job automation, which changes the traditional profile of the labour market in a number of professions and sectors, bring about significant social risks. As a result, we are observing an upswing of populism in politics, which in itself generates new economic risks and harbours continued financial market volatility. Sixth. An important point for us.
The biggest risks are a global economic downturn, a  Page 2/4  Zurich, 22 September 2022 Thomas Jordan  News conference  worsening of the gas shortage in Europe and a power shortage in Switzerland. Furthermore, a resurgence of the coronavirus pandemic cannot be ruled out. Monetary policy tightening  Ladies and gentlemen, allow me to return to our monetary policy. I would like to explain today’s decision. Last quarter, our conditional inflation forecast indicated that, without a further tightening of monetary policy, inflation would be above the range consistent with price stability at the end of the forecast horizon. This meant that further interest rate increases might be needed to stabilise inflation in the range consistent with price stability over the medium term. This has turned out to be the case. While Switzerland’s inflation rate of 3.5% is low by international comparison, it is significantly above the 0% to 2% range we equate with price stability. There are also growing signs that higher prices are increasingly spreading to goods and services that are not directly affected by the war in Ukraine or the consequences of the pandemic. Information from our delegates for regional economic relations suggests that companies can more easily transfer higher costs to their sales prices. In addition, energy prices have continued to rise overall and are increasing inflationary pressure in many sectors. This heightens the risk of second-round effects. We have therefore concluded that a significant increase in the SNB policy rate is appropriate.