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ECB Official Makes Case for Rate Increase as Inflation Pressures Mount in France, Spain

European Central Bank Governing Council member Fabio Panetta signaled support for an interest-rate hike while cautioning against committing to a predetermined path for future tightening moves. The statement comes as inflation in France and Spain accelerated to the fastest pace since 2024, strengthening arguments for monetary policy adjustment. Some economists anticipate a 25 basis point increase at the ECB's June meeting. Regional consumer price expectations may face additional upward pressure from geopolitical tensions, according to ECB analysis. Policymakers show diverging views on the timing of action, reflecting broader uncertainty about price pressure durability across the euro zone. The ECB faces a delicate balancing act as it weighs immediate inflation concerns against risks of premature tightening.