ECB Governing Council member Nagel: Will act decisively if necessary to bring inflation back to the 2% target.

Joachim Nagel, President of the Bundesbank and member of the ECB Governing Council, said the European Central Bank will take decisive action if necessary to bring inflation back to its target. He said on Friday that consumer price growth has picked up again and that further increases in prices in the coming weeks cannot be ruled out, with rising energy costs the main driver. "Medium-term inflation expectations must remain firmly anchored at our 2% inflation target," Nagel said. "Therefore, the Governing Council will continue to monitor price developments very closely and will act decisively if necessary." Nagel's remarks came a day after the ECB left borrowing costs unchanged. The ECB had previously raised rates by 25 basis points twice after the Iran war caused energy costs to surge. Euro-area inflation is expected to accelerate to 3.9% in October from 3.8% the previous month. People familiar with the matter said on Thursday that officials are prepared to tighten policy again in December if the inflation outlook does not improve. The deposit rate currently stands at 2.5%, at the upper end of the range seen as neutral for the economy. Nagel stressed that, given recent inflation developments, Thursday's decision to keep rates unchanged was "not easy." ECB President Christine Lagarde said on Thursday that the meeting had discussed a rate hike this month and ultimately decided unanimously to hold off for now. "On the positive side, no significant second-round effects have been observed so far," Nagel said. But to keep it that way, keeping inflation expectations anchored is "crucial." "This was also one of the key messages from yesterday's rate decision," Nagel said.