The final phase of lowering euro zone inflation may be the toughest and firms along with governments need to chip in to avoid further policy tightening from the European Central Bank, Bundesbank chief Joachim Nagel said on Wednesday.

The ECB snapped a streak of ten straight rate hikes last month and investors are increasingly betting that its next move will be a cut, possibly as soon as next April, since consumer price growth in now back under 3%.

Looking to dampen the inflation euphoria, Nagel argued that the biggest difficulty may still be ahead, echoing similar comments from ECB board member Isabel Schnabel who said it could take much longer to get from 3% to 2%, than to get to the current level from over 10%.

"The 'last mile' before we reach our inflation target may well be the hardest," Nagel said in a speech in London.

The economic slowdown is helping this process and ECB policy will continue to exert its influence over the next two years but there is a big burden on firms and governments.

For firms, the key will be to start absorbing some of the justified wage increases and live with smaller profit margins while in the case of governments, restrictive fiscal policy is needed, Nagel argued.

The good news is that even if nominal wage growth is quick, this has not translated into a so-called wage-price spiral.

"We are expecting wage increases to have some effects on prices," Nagel said. "But we do not see any evidence of a self-reinforcing spiral." (Reporting by Marc Jones; writing by Balazs Koranyi; Editing by Toby Chopra)