European Central Bank President Christine Lagarde said rising bond yields will restrain economic growth and limit the pass-through of higher energy costs into inflation.

"While economic growth has remained resilient, long-term interest rates have risen significantly since our last meeting, which will slow growth and keep the degree of price pass-through below what we estimated at the time of our September projections," Lagarde said on Monday.

Speaking to European lawmakers in Brussels, she said the absence so far of second-round effects means the ECB should "take a cautious approach as appropriate to control inflation."

ECB officials are weighing whether further rate hikes are needed to control inflation and prevent higher energy costs from spreading into broader price and wage demands.

Alongside the conflict in the Middle East, they must also contend with a global bond market sell-off, which is a particular concern for some eurozone member states under fiscal strain.