Inflation headache for eurozone

The european Central Bank faces a major headache after inflation rose unexpectedly in two of the eurozone’s biggest economies.

French inflation rose from 7pc to 7.2pc in February – taking it to the highest level since the launch of the euro in 1999. In Spain, it rose from 5.9pc to 6.1pc.

The figures cast doubt over hopes that figures tomorrow will show inflation across the entire eurozone fell to 8.1pc in February from 8.6pc.

A higher than expected figure will pile pressure on the eCB to press ahead with further aggressive interest rate hikes.

The central bank has already raised rates from minus 0.5pc last July to 2.5pc and looks set to hike them to 3pc on March 16 and to 4pc by the end of the year.

‘French inflation has not reached its peak,’ said ING economist Charlotte de Montpellier. ‘Given how underlying global inflation will probably continue to go up in the coming months, that will give further arguments to the eCB to continue to raise rates.’