PARISMADRID, Feb 28 Reuters Inflation in two of the euro zone39;s biggest economies rose unexpectedly this month, data showed on Tuesday, pushing up European Central Bank rate hike expectations and challenging the narrative that a rapid easing in price growth is now underway.

The ECB plans to raise its key rate by 50 basis points in March to 3 but some policymakers have called for more cautious steps thereafter as past rate hikes are now taking hold and the economy is starting to respond.

Inflation in France rose to 7.2 from 7.0, beating forecasts for 7.0, while in Spain, it jumped to 6.1 from 5.9 and ahead of the 5.5 seen in a Reuters survey.

The figures also raise doubts that the euro zone39;s combined figure, due on Thursday, will show a fall to 8.2 from 8.6 but economists say that the German number, due on Wednesday, will be more crucial than Tuesday39;s releases.

Markets now fully price in another 150 basis points of rate hikes by the end of the year, taking the peak in the ECB39;s deposit rate to 4, reflecting the view that it will take longer for the ECB to get price growth back to its 2 target.

Germany39;s 10year bond yield, the benchmark for the euro zone, jumped to its highest level since 2011 at 2.66 as traders ramped up bets that ECB rates will peak around 4 at yearend.

Expectations for the peak in ECB rates have risen by over 40 basis points this month on fears that inflation will be more persistent than expected, particularly for core goods that…