Week Ahead (2 March)

Monday, 2 March – Euro area flash inflation in focus as ECB watches undershoot risks and euro strength 

Today, Eurostat releases its flash estimate of euro area inflation for February, a key data point for markets assessing whether the disinflation trend is consolidating ahead of the 18 March meeting of the European Central Bank Governing Council. Although the ECB left rates unchanged at its February meeting, incoming inflation data could directly shape the policy debate heading into the next decision point. 

The monetary policy backdrop remains defined by the ECB’s “good place” narrative. In February, the Governing Council reaffirmed that inflation is expected to stabilise at its 2% target in the medium term and that the euro area economy remains resilient despite a challenging global environment. With growth close to potential and inflation broadly aligned with target, policymakers judged there was no immediate case for policy adjustment, but stopped short of pre-committing beyond March. January data broadly supported this assessment, while also highlighting emerging asymmetries. Headline inflation eased to 1.7% year-on-year, the lowest level since 2022. Services inflation moderated to 3.2%, energy prices turned sharply negative at -4.0%, and non-energy industrial goods inflation remained subdued. The composition points to continued disinflation, driven largely by energy and external factors rather than a sharp cooling in domestic demand. 

In the meantime, ECB communication has also increasingly emphasised the gap between measured inflation and perceived inflation. Speaking to the European Parliament last week, Christine Lagarde noted that households continue to feel stronger price pressures than headline data suggest. Despite the political salience of the issue, it has not yet altered the ECB’s macro assessment or policy stance. 

Looking ahead to March, the exchange rate remains a key swing factor. Continued euro strength would further dampen import prices and tighten financial conditions, particularly for export-oriented economies. Against this backdrop, the February inflation data will matter as one of the final inputs ahead of the next governing council, where the ECB will reassess whether its “good place” remains intact or whether the balance of risks is beginning to tilt. 

Tuesday, 3 March – UK Chancellor Reeves to deliver Spring Statement against weak growth and rising labour market strain 

Tomorrow, UK Chancellor Rachel Reeves will unveil her Spring Statement, offering an updated snapshot of the public finances and economic outlook, albeit with limited expectations of major fiscal announcements. The government has deliberately rebranded the event away from a “spring budget”, underlining its intention to reserve substantive tax and spending decisions for the autumn. 

The statement will be accompanied by the latest economic forecasts from the Office for Budget Responsibility (OBR). The release remains important for markets as it will indicate whether the government remains on track to meet its fiscal rules, notably the commitment not to borrow for day-to-day spending and to put debt on a declining path by the end of the parliament. At the time of the November Budget, the OBR judged that Reeves was meeting her primary fiscal rule with a buffer of around £21.7 billion in headroom.  

The economic backdrop is mixed. UK GDP growth slowed markedly in the second half of 2025, with output expanding by just 0.1% in Q4 2025 and 1.3% over the year as a whole, undershooting earlier official forecasts. Services activity has largely stalled, construction output has contracted, and business investment weakened late in the year despite a modest annual increase. Household consumption remains positive but subdued. 

Inflation dynamics have improved, but pressures persist. Headline inflation fell to 3.0% in January, its lowest level since early 2025. With inflation easing, markets increasingly expect the Bank of England to begin cutting interest rates from its current 3.75% level later this spring, providing some prospective relief to households and firms. 

Labour market trends, however, are deteriorating. Unemployment rose to 5.2% in Q4 2025, the highest rate in nearly five years, with the increase concentrated among younger workers. Thus, youth unemployment has climbed to around 16%, reflecting weak growth, higher labour costs and structural adjustments across sectors. Businesses have warned that higher employer National Insurance contributions and sharp increases in the minimum wage for younger workers have raised hiring costs at a fragile moment for demand. 

Politically, Reeves has sought to strike a cautious tone, arguing that stability and predictability are now essential after last autumn’s tax-heavy budget. She has framed 2026 as the year households should begin to feel the benefits of Labour’s economic strategy, while acknowledging that pressures on living standards and businesses remain acute. 

Thursday, 5 March – General Court to hear Meta’s challenge to EDPB decision following CJEU ruling on standing 

This week, the General Court, the bloc's lower court, is set to hear Meta Platforms Ireland v European Data Protection Board (T-8/24), a case whose procedural and systemic importance has been materially heightened by a recent judgement of the Court of Justice of the European Union (CJEU) on judicial review under the GDPR’s one-stop-shop mechanism. 

Per our 12 February Tech Report, the CJEU last month ruled in WhatsApp Ireland v European Data Protection Board (C-97/23P) that companies may directly challenge binding decisions of the European Data Protection Board before EU courts where those decisions leave national authorities with no discretion and produce immediate legal effects for the undertaking concerned. In overturning the General Court’s earlier inadmissibility ruling, the CJEU confirmed that EDPB binding decisions can constitute reviewable acts of direct concern. 

That clarification is directly relevant to T-8/24, which concerns Meta’s challenge to EDPB Urgent Binding Decision 01/2023, adopted under Article 66(2) GDPR at the request of the Norwegian supervisory authority. The contested decision required Irish authorities to impose immediate corrective measures, including a ban on Meta Ireland’s processing of personal data for behavioural advertising on the basis of contract and legitimate interest. 

Meta argues that the EDPB exceeded its competence and effectively substituted its own assessment for that of the lead supervisory authority, reshaping the company’s legal position without affording it a direct procedural route to contest the Board’s intervention. In light of the CJEU’s recent ruling, the admissibility barrier that previously constrained such actions has been significantly lowered, increasing the likelihood that the General Court will now engage with the substance of Meta’s claims. 

Beyond T-8/24, the judgement is expected to unblock progress in a wider cluster of pending cases involving Meta and the EDPB, all testing the scope of the Board’s binding powers under the GDPR. These (T-129/23, T-153/23, T-325/23) include challenges relating to cross-border data transfers, behavioural advertising and transparency obligations, many of which resulted in significant financial penalties or structural remedies at national level. 

Wednesday, 4 March - Commission to present Industrial Accelerator Act following last-minute postponement due to internal disagreements 

The European Commission is now expected to present the long-trailed Industrial Accelerator Act (IAA) on 4 March, after previously postponing the proposal by one week amid continued internal disagreement over its scope and procurement rules. The file remains politically sensitive and was kept off last week’s College agenda, despite earlier expectations of a late-February tabling. 

The IAA is a central pillar of President von der Leyen’s Clean Industrial Deal and is intended to feed directly into the broader competitiveness and Single Market agenda that EU leaders will take forward at the 19–20 March European Council. According to Commission officials, the additional delay is meant to allow further internal convergence rather than signal a loss of political momentum. 

Substantively, the initiative is designed to strengthen European industrial capacity by introducing a clearer European preference in public procurement and other publicly funded programmes, particularly in energy-intensive industries, net-zero technologies and the automotive sector. Beyond procurement, the Act would establish horizontal concepts such as “Made in Europe” definitions, local-content thresholds and low-carbon criteria, which are expected to cascade across EU industrial, climate and state-aid policy frameworks. 

However, the draft has faced extensive resistance during inter-service consultation, with several Commission departments raising concerns over market closure risks, cost inflation and administrative complexity. While such objections do not formally block adoption, their breadth has complicated efforts to finalise a College-ready text. The cabinet of Industry Commissioner Stephane Sejourne has publicly downplayed the criticism, describing it as based on “misconceptions,” while acknowledging the need for further internal discussions to “solidify” the proposal. 

A core unresolved issue remains the geographic scope of “Made in Europe”. Early drafts anchor eligibility primarily in EU and EEA production. However, the Commission has explored whether manufacturing in certain third countries should be treated as equivalent. DG TRADE has pushed for a broader approach encompassing free-trade-agreement partners. Similarly, DG MENA, the directorate in charge of relations with the Middle East, North Africa and the Gulf is also pushing for the inclusion of all countries that have association and cooperation agreements with the EU to be included. On the other side, industrial policy officials argue for a much narrower definition tied closely to EU-based production capacity. These fault lines within the Commission itself mirror wider Member State divisions between more open, export-oriented economies and those prioritising domestic industrial reinforcement, usually led by France. 

Industry pressure has intensified alongside the delay. Last Thursday, European steel producers publicly urged the Commission to explicitly include low-carbon steel within the IAA’s scope and to define “local” production narrowly, limited to the EU and close partners such as the UK and EEA states. Steelmakers warn that without clear and predictable “Made in Europe” criteria, investment decisions in green steel risk being deferred, undermining the creation of credible European lead markets. Other sectors, including pharmaceuticals, have likewise expressed frustration over repeated slippage and the lack of visibility on final parameters. 

Politically, the clock is also getting tighter because the IAA will have this week to allow for meaningful discussion ahead of the March European Council. Failure to do so could weaken the credibility of the “Made in Europe” push within the wider competitiveness agenda.