Inflation in France has risen more sharply than market forecasts, while Spain also experienced an unexpected acceleration in price growth, providing strong support for the European Central Bank's position that further interest rate cuts are unnecessary. Specifically, France's consumer prices increased by 1.1% year-on-year, up from 0.4% the previous month, significantly surpassing the median economist forecast of 0.8%. In Spain, the inflation rate edged up from 2.4% to 2.5%, whereas analysts had generally predicted a decline to 2.3%.

Among the members of the ECB's Governing Council, French Central Bank Governor François Villeroy de Galhau holds a relatively more dovish stance. He has warned that a stronger euro and cheap imports from China could exert downward pressure on inflation this year. Consequently, he has repeatedly called for the ECB to adopt a flexible and pragmatic approach when setting borrowing costs. The Bank of France anticipates that price growth will accelerate in the coming months, projecting an inflation rate of 1.3% by 2026.

Data released on Friday indicated that the drag on inflation from energy costs lessened in February, compared to the same month last year when regulated prices were raised. Meanwhile, Spain's economy, benefiting from a significant influx of immigrants and robust tourism performance, has been growing faster than other major members of the eurozone monetary union.

Currently, the ECB's interest rate policy has entered a notable period of stability. At its first monetary policy meeting of the year on February 5, 2026, the ECB decided to keep its three key interest rates unchanged for the fifth consecutive time, a move widely anticipated by the market. Notably, ECB officials have repeatedly expressed satisfaction with the current level of borrowing costs, which have remained unchanged since last June, as inflation has hovered near the 2% target.

In recent speeches and meeting minutes, ECB President Christine Lagarde has reiterated that the committee will continue to adhere to a data-dependent approach and assess policy on a meeting-by-meeting basis, without pre-committing to a specific interest rate path. Several major international financial institutions, including Deutsche Bank AG, now predict that due to uncertainties in global trade and nonlinear fluctuations in the domestic inflation trajectory, the ECB is highly likely to maintain its deposit facility rate at 2.00% throughout 2026.

Eurozone-wide price data will be officially released next week, with figures from Germany, due later on Friday, expected to reach 2.1%. Additionally, the ECB is scheduled to hold its next interest rate decision on March 19, when it will publish its latest quarterly economic projections, which is often viewed as a critical window for potential policy adjustments.