Inflation in the euro area will "in all likelihood" ease as soon as next year but the European Central Bank is ready to act if it does not, ECB policymaker Isabel Schnabel has said.
Euro zone inflation has been rising more than expected.
But the ECB has stuck to its belief of a temporary spike caused by higher prices of oil and higher raw materials, and pandemic-related shortages in components such as microchips.
Schnabel, Germany's representative on the ECB's board, sought to assuage concerns of a repeat of the 1970s, when inflation was nearly 8% in her country.
"Today, against the background of rising inflation rates, particularly in Germany, it was a matter of concern to me to alleviate people's concern that inflation may remain persistently too high or even shoot up uncontrollably," Schnabel told an audience of German entrepreneurs.
"In all likelihood, inflation will noticeably decrease as soon as next year," she added.
Prices in the 19-country euro zone grew by 3% year on year last month according to preliminary estimates, surging well above the ECB's 2% target for the first time in 10 years.
But the ECB expects price growth to ease back to 1.7% next year and 1.5% in 2023.
Schnabel said the central bank, which reduced the pace of its emergency bond purchases last week, was in no rush to tighten its policy unless inflation rose to its target sooner than expected.
"We will only start the normalisation process when we are confident of reliably reaching our inflation target," she said.
"But should inflation sustainably reach our target of 2% unexpectedly soon, we will act equally quickly and resolutely," she reassured.
She listed three main reasons why the latter might happen - persistent disruptions to supply, structural changes such as the green transition and greater optimism among consumers.
"If we succeed in breaking the vicious circle of limited room for price increases, slow growth and declining inflation expectations, then we will be able to escape negative interest rates," Schnabel said.
"There are mounting signs that the current fiscal and monetary policy mix can achieve that," she added.
Meanwhile a key market gauge of euro zone inflation expectations rose to its highest level since mid-2015 today, a further sign that investor perceptions over the direction of future inflation are shifting.
Euro zone bond yields were broadly steady, although relief over a slowdown in the pace of European Central Bank purchases appeared to be in the past.
And evidence that expectations for higher inflation, boosted by Germany's election race and signs of supply bottlenecks in recent weeks, moved into the spotlight.
The five-year, five-year breakeven inflation forward, a long-term market inflation gauge tracked by the ECB, rose to 1.8207% - its highest level since mid-2015 and a step closer to the ECB's new 2% inflation target.
It has risen almost 15 bps since the start of September.
Breakeven inflation in Germany, Europe's biggest economy, has also shot up, a sign for some analysts that investors expect policies under the next German government could stoke inflation.
Germany's 10-year breakeven inflation rate is at around 1.59% - its highest since late 2018.