The work of the European Central Bank (ECB) in its fight against the increase in the cost of living “has not finished” and if it wants to tame the persistent high inflation it will have to be “stubborn” and continue increasing interest rates, according to the president of the Bundesbank, Joachim Nagel, in an interview with ‘Financial Times’.

“If we want to tame this stubborn inflation, we will have to be even more stubborn,” defends the German central banker, for whom there is no doubt that price pressures are strong and widespread throughout the economy.

For the president of the Bundesbank, the inflation rate in the euro zone should still fall “significantly and sustainably” from the current 8.5% before the central bank stops raising interest rates.

“There is still a ways to go, but we are approaching restrictive territory,” he says.

In this way, the president of the Bundesbank is positioned in favor of maintaining the ECB’s road map in its fight against inflation coinciding with the meeting of the United States Federal Reserve, which this Wednesday could announce a 25 basis point rise in its reference rate, despite the recent turmoil in financial markets.

Regarding the Credit Suisse bailout agreed last weekend, Nagel acknowledges that it is possible that banks are “more cautious” in lending, although he considers that it is too early to draw conclusions and minimizes the risks of contagion for the bank the eurozone.

“We are not facing a repeat of the financial crisis that we saw in 2008,” he says. “We can handle this,” she adds.

The latest Bundesbank projections assume that the German economy will probably contract again in the first three months of 2023, which added to the 0.4% decline in the fourth quarter of 2022 would mean the entry into technical recession of the ‘European locomotive’ ‘.