Banks in the euro zone will have to raise provisions to cope with the consequences of the economic slowdown due to the fallout from Russia's war in Ukraine, ECB Vice-president Luis De Guindos said today.

"The economic slowdown will lead to a potential increase in insolvencies. We are already trying to get the banks to bring forward their plans because it is going to have an impact without a doubt," De Guindos said.

"Let's not be blinded by the short term effect, banks will have to increase provisions," recognising a short-term boost for banks from higher interest rates.

Luis de Guindos also said today that euro zone inflation is becoming increasingly broad while growth is weakening as the bloc struggles with the fallout from Russia's war in Ukraine.

"We are seeing that in the third and fourth quarters there is a significant slowdown and we may find ourselves with growth rates close to zero," de Guindos told a conference.

Inflation is expected to have accelerated to 9.6% this month, a record high for the 19-country currency bloc.

Underlying price growth, which filters out volatile food and fuels prices, is also seen accelerating.

To combat higher borrowing costs, the ECB raised rates earlier this month by an unprecedented 75 basis points just weeks after a 50 basis point move.

It promised several more steps over the coming months as euro zone inflation was at its highest rate in nearly a half a century and at risk of becoming entrenched.

Investors are currently split between a 50-and a 75-basis point rate hike in October, with subsequent increases seen at every meeting through next spring.

De Guindos did not give any clue what magnitude any next increase in interest rates would look like but added that future moves would be "data-dependent", saying that inflation pressures had increased recently.