Employers in Switzerland have raised wages by a mean of 1.1% this 12 months and purpose to boost wages by 2.2% in 2023, UBS mentioned in a survey of 290 corporations. Adjusted for inflation, this interprets to a 1.8% decline in actual phrases in 2022 after which a modest enhance of 0.1% subsequent 12 months.

In consequence, Swiss residents face the largest loss in actual wages since 1942, UBS notes.

In 2022, to compensate for the lack of buying energy, Swiss unions are demanding a 3-5% wage enhance. Nevertheless, because of slower development, the nation is more likely to keep away from an inflationary spiral, when rising costs result in greater wages, and their rise, in flip, stimulates greater inflation.

“A wage enhance of simply over 2%, effectively under the present charge of inflation, is unlikely to place employees in a celebratory temper,” Daniel Kalt, chief economist at UBS Switzerland, advised Bloomberg. “This, nonetheless, assumes that there isn’t a wage-price spiral that might drive inflation additional.”

The expansion charge of shopper costs within the nation remained above the goal of the Swiss Nationwide Financial institution for the ninth month in a row. Its president, Thomas Jordan, has repeatedly hinted at rate of interest hikes. Nevertheless, inflation in Switzerland is far decrease than in most neighboring EU, UK or US international locations.

In October it was 3% in Switzerland. On the identical time, inflation reached 6.2% in France, 11.9% in Italy, 10.4% in Germany, and 11% in Austria.