European Central Bank Governing Council member Joachim Nagel said the ECB may need to raise rates into mildly restrictive territory if high energy prices persist, Bloomberg reported Tuesday, citing comments by Nagel in London.

Nagel said prolonged high energy prices could trigger second-round inflation effects through wage negotiations, the report said. He added that policymakers need to remain "vigilant."

Nagel said the ECB's transmission protection instrument can only be used to address problems with monetary policy transmission, not fiscal challenges in individual euro-area countries, Bloomberg said.