An encoder encodes a video signal formed of video frames, each including image blocks. The encoder includes a processing unit which calculates at least one high resolution reference image block on the basis of previously encoded image blocks by executing a super resolution algorithm to perform a local motion compensation; and a motion compensation unit which calculates on the basis of the calculated high resolution reference image block a temporal predictor which is subtracted from a current image block of the video signal. Together, the encoder and a corresponding decoder improve the signal quality of a video signal significantly.