Although headline inflation is well below its peak, underlying price growth, a key indicator of the durability of inflation, rose to a record high 5.3% last month, raising the risk that price growth will get stuck above the ECB's 2% target.
"It appears that core inflation will remain at very high levels beyond March and only decline slowly," Nagel told a news conference in the Indian city of Bengaluru on the sidelines of a G20 finance meeting. "That's why I'm not ruling out that further interest rate hikes, significant interest rate hikes, beyond March, may be necessary."
The ECB has already promised to raise rates by 50 basis points to 3% in March and markets now price another 75 basis points of moves before the end of the summer.
'Yay, something to look forward to!'