BERLIN: The surge in euro zone inflation is temporary and consumer prices should fall sharply next year, European Central Bank board member Isabel Schnabel told German broadcaster ARD on Wednesday.

"This means we will keep financing conditions favourable in order to support the economy," she said.

"There is no reason for an interest rate hike at the moment."

As oil prices rebound after their collapse a year ago, euro zone inflation is close to the ECB's nearly 2% target but underlying price growth, a measure closely watched by the policymakers, remains below 1%, an uncomfortably low level for the ECB.