President of the German Bundesbank warns of rising inflation

"We cannot ignore the high energy prices," Nagel told the German newspaper Handelsblatt. "Interest rate hikes are becoming more and more likely if the inflation picture does not fundamentally change."

"There is still a lot to come in terms of inflation," warned Nagel, who is also a member of the ECB's Governing Council. He did not want to rule out inflation rates of over four percent in individual months. The central banker emphasized: "Even if the war ends soon, the inflation rate could remain higher for much longer than we thought just a few weeks ago."

Core inflation is significantly lower

Most recently, inflation in the eurozone rose to 3.0 percent in April. This is well above the ECB's target of two percent inflation in the medium term. However, the core inflation rate, which excludes volatile energy and food prices, is significantly lower.

As there are still no signs of progress towards an end to the Iran war and the transportation of goods through the Strait of Hormuz remains impeded, expectations are rising on the financial markets that the ECB could raise interest rates. However, the head of the French central bank, Francois Villeroy de Galhau, made it clear on the radio station "France Info" that there is not yet sufficient information on the further development of core inflation.