"The German economy proved a lot over the past couple of weeks and months, so the adaptation capacity of the German industry is pretty high, the energy crisis is more or less solved. But core inflation — which strips away volatile food, energy, alcohol and tobacco prices — increased to an all-time high of 5.7%. Nagel said the persistence of high core inflation showed the ECB Governing Council, in which he is considered one of the more hawkish members, has further to go in tightening monetary policy. He expects core inflation to eventually follow the headline figure downwards, but reiterated that policymakers have to "stay really alerted when it comes to the inflation story." "There is no contradiction between what we have to do on the price stability side and on the financial stability side," he said.

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