German inflation forecasts were revised sharply higher by the Bundesbank on Friday, highlighting the pressures that this week led the European Central Bank to announce it would probably raise interest rates next month.

Axel Weber, Bundesbank president, was one of the ECB governing council members most strongly in favour of raising borrowing costs. On Friday, the Bundesbank said it expected German inflation to average 3 per cent this year – 0.7 percentage points higher than it had expected in December.