The ECB's projections foresee medium-term inflation even falling below the bank's target of 2%, though there is currently “great uncertainty” over the outlook, she added.
“That is why we should not raise interest rates prematurely, as that could potentially choke off the recovery,” Schnabel said. “But we will act quickly and decisively if we conclude that inflation may settle above 2%.”
She acknowledged, however, that the bank views the current year-on-year figures “with some concern, as they are higher than we initially expected.” But she noted that, calculated over a longer period, inflation has not increased as much as they suggest.
Inflation is traditionally a particularly acute concern in Schnabel's native Germany, which has Europe's biggest economy.