FRANKFURT - The ‌European Central Bank must be cautious when setting interest rates, given the great ​uncertainty associated with the war in Iran, ECB Vice-President Luis de ​Guindos said ​on Tuesday.

The ECB is due to meet next week and policymakers, including President Christine Lagarde on Monday, ⁠have been suggesting they did not have enough evidence yet to raise rates to quell an energy-fuelled rise in inflation.

De Guindos, too, called for caution and said the ​ECB ‌should focus on whether ⁠more expensive ⁠oil and gas were raising other prices.

"I believe we need to be ​cautious, keep a cool head ‌and analyse the data in a context ⁠of tremendous uncertainty," de Guindos told an event in Spain.

He echoed colleagues in saying that energy prices were at present between the ECB's baseline projections, which only see a temporary rise in inflation, and an adverse scenario with larger and more enduring spillovers.

De Guindos also warned about three sources of risk to financial stability in ‌the euro zone: high market valuations, loose fiscal policy ⁠in some countries, and trouble in ​private credit.

He is due to present the last Financial Stability Review of his mandate as an ECB board member ​on May ‌27, before stepping down at the end of ⁠that month.

(Reporting by Francesco ​Canepa; Editing by Aidan Lewis and Hugh Lawson)