There are concerns that high inflation could jeopardize the government’s plans on reforming the pension system.
Voters will be deciding in September if to implement the idea. Ministers say it's essential pensions are reformed or the system could run out of money in as little as 8 years, as more and more of the baby boomers retire.
The two main planks of the reforms are raising the retirement age for women to 65, to match it with men, and hike VAT to 8.1%. That’s a rise of 0.4%.
But inflation in June stood at 3.4%, higher than many analysts expected – and high by Swiss standards.
There are worries the cost-of-living pressure could put voters off a VAT rise.
In addition, health insurance premiums are set to go up in the New Year only adding to the pressure.
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