Bundesbank President Joachim Nagel is pushing for further interest rate hikes in the euro area in the fight against record high inflation. "Further interest rate hikes are necessary to bring the inflation rate back to two percent," said Nagel, according to the text of the speech at the start of a symposium by the central bank in Frankfurt. The rate of inflation has been well above this target set by the European Central Bank (ECB) for months.

The longer inflation remains high, the more difficult it becomes for monetary policy to restore price stability. "And that would increase the risk that inflation would solidify at a high level in the medium term," warned Nagel.

"I will therefore continue to work to ensure that we as the Governing Council do not let up too early, that we continue to push monetary policy normalization stubbornly forward - even if our measures dampen economic development," emphasized the Bundesbank President, who is on the Governing Council about decides monetary policy in the euro area. "Because in a situation where monetary policy gets behind the curve, the overall economic cost would be significantly higher."

For months, the rise in energy and food prices has fueled inflation. In October, consumer prices in the euro area were 10.7 percent above the level of the same month last year. In Germany, the inflation rate rose to 10.4 percent in October.

"The inflation rate in Germany is likely to remain high in the coming year. I think it's likely that there will be a seven before the decimal point on average in 2023," predicted Nagel. "In any case, the inflation rate for Germany should remain elevated for a longer period of time."