France, Spain Inflation Exceeds Forecasts on Oil, Food

In June 2025, inflation in both France and Spain rose for the first time this year, exceeding economists' expectations and raising concerns about ongoing geopolitical tensions in the Middle East. In France, EU-harmonized consumer prices increased by 0.8% year-over-year, while Spain's inflation rate climbed to 2.2%. Spain's inflation was mainly driven by rebounding fuel prices and higher costs for food and non-alcoholic beverages, with core inflation holding steady at 2.2%. In France, the rise was attributed to stronger services inflation, partly due to Easter timing, and marginally higher food prices. European Central Bank President Christine Lagarde warned that continued disruptions in oil and gas flows could further elevate prices and trigger secondary effects. These inflationary pressures have emerged shortly after the ECB cut its key interest rate, marking a shift after several months of cooling inflation.