According to a report from Zhitong Finance APP, German Bundesbank President and ECB Governing Council member Joachim Nagel stated that the European Central Bank will take decisive action when necessary to bring inflation back to its target level.
He said on Friday that consumer price growth is picking up again, and further price increases in the coming weeks cannot be ruled out, with rising energy costs being the main driving factor.
"Medium-term inflation expectations must remain firmly anchored to our 2% inflation target," Nagel said. "Therefore, the Governing Council will continue to closely monitor price developments and act decisively when necessary."
Nagel's remarks came one day after the European Central Bank kept borrowing costs unchanged. Previously, the ECB had raised rates by 25 basis points twice after the Iran war caused energy costs to surge.
Eurozone inflation for October is expected to accelerate to 3.9% from 3.8% in the previous month. People familiar with the matter said on Thursday that officials are prepared to tighten policy again in December if the inflation outlook does not improve.
The deposit rate currently stands at 2.5%, at the upper limit of the range considered to be a neutral impact of monetary policy on the economy.
Nagel emphasized that given recent inflation developments, Thursday's decision to keep rates unchanged was "not easy."
ECB President Christine Lagarde said on Thursday that the meeting had discussed a rate hike this month, but ultimately unanimously decided to hold off for now.
"On the positive side, no significant second-round effects have been observed so far," Nagel said. But to keep it that way, it is "crucial" that inflation expectations remain anchored.
"This is also one of the key messages of yesterday's rate decision," Nagel said.
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