Olaf Scholz’s Social Democrats in Germany have narrowed their shortlist on who to name as Bundesbank president to four candidates, including Joachim Nagel and Isabel Schnabel, according to a person familiar with the party’s thinking.

The SPD, who won the right to nominate the successor to Jens Weidmann as part of the recent coalition deal, are set to discuss the choice toward the end of the week with their governing partners, the Greens and Free Democrats.

Mr Nagel is a former Bundesbank board member now at the Bank for International Settlements, while Ms Schnabel is a member of the European Central Bank’s Executive Board and hasn’t worked at Germany’s central bank.

Deputy Finance Minister Joerg Kukies and Jakob von Weizsaecker, Scholz’s chief economist at the German finance ministry, aren’t on the list, according to sources.

The post of Bundesbank president will become vacant as of January after Mr Weidmann’s unexpected resignation last month. During his decade in the role, he was frequently at the centre of opposition to the ECB’s ultra-loose policies and crisis aid, though more recently he supported most of its response to the pandemic.

The change in Bundesbank leadership comes at a crucial time, with a new government taking office and resurgent coronavirus infections threatening to shut down activity across the economy. Inflation just hit 6pc in Germany, where citizens are notoriously averse to rising prices.

Mr Weidmann will still be Bundesbank chief at the ECB’s all-important decision in December about the future of stimulus after its €1.85trn bond-buying program expires in March.

Whoever replaces him will then handle the aftermath as policy makers continue to gauge how transitory the current inflation spike will be.