The European Central Bank could continue to reduce interest rates as eurozone inflation approaches its target, Bundesbank President Joachim Nagel said.

The European Central Bank has room to cut its interest rates further if inflation eases to its 2% goal this year as it expects, ECB policymaker Joachim Nagel said on Tuesday, adding the outlook for prices was "encouraging".

European Central Bank officials would be “well advised” to stop openly discussing their preferences for interest rates amid sticky inflation and elevated uncertainty, according to Governing Council member Joachim Nagel.

Nobody knows where the neutral rate is. But I guess the most important message is that we see in the Governing Council that inflation will come back to our target maybe by midst of this year. And this is good news.