ECB Governing Council member and Bundesbank president Nagel said persistent high energy prices could force the ECB to raise rates to a level that suppresses growth, potentially moving policy into a mildly restrictive range. He added it is too early to draw conclusions. Nagel warned upcoming wage negotiations, including in Germany, could trigger second-round inflation effects, and the longer high energy prices persist the greater that risk. On the Transmission Protection Instrument (TPI), he said

ECB Governing Council member and Bundesbank president Nagel said persistent high energy prices could force the ECB to raise rates to a level that suppresses growth, potentially moving policy into a mildly restrictive range. He added it is too early to draw conclusions. Nagel warned upcoming wage negotiations, including in Germany, could trigger second-round inflation effects, and the longer high energy prices persist the greater that risk. On the Transmission Protection Instrument (TPI), he said it can only be activated if monetary policy transmission is impaired and is not intended to address a euro-area country's fiscal problems.