Christine Lagarde Resigns as ECB President, Will Step Down on February 7

Christine Lagarde will step down as president of the European Central Bank on 7 February 2027, the bank announced on Thursday, 29 October. The decision came hours before the ECB's latest interest rate decision in Frankfurt.

The ECB said in its press release: "European Central Bank President Christine Lagarde today informed the Governing Council and the President of the European Council Antonio Costa that she will step down from her position on 7 February 2027." The Governing Council thanked Lagarde warmly for her work and gave her a long standing ovation, the bank said.

The search for a successor starts today

Antonio Costa, President of the European Council, said he had been informed of the decision and accepted it. "I have been informed by Christine Lagarde, President of the European Central Bank, of her intention to step down from her role on 7 February 2027. I respectfully acknowledge her decision," Costa said in a statement issued at 11:00 Brussels time.

Costa said the process to appoint her successor will start today and proceed without delay, with a view to a timely decision by the European Council acting in its euro area composition. The successor will be appointed by the European Council following the nomination process in Article 283 of the Treaty on the Functioning of the European Union.

Leaving months before her term was due to end

Lagarde has led the ECB since November 2019, when she succeeded Mario Draghi. Her term was scheduled to run until the end of October 2027, so the February departure brings her time in Frankfurt to an end about eight months early.

Speculation about an early departure had been mounting for months, with the World Economic Forum seen as a likely destination. That remains reported speculation, with no next role confirmed. Leaving on February 7 gives current EU leaders time to pick a successor well before a French presidential election that polls show far-right candidate Marine Le Pen is favourite to win, CNN reported.

Former Netherlands and Spain central bank governors Klaas Knot and Pablo Hernandez de Cos are seen as frontrunners to replace her. The Times also names former French governor Francois Villeroy de Galhau, and says a Bloomberg survey of economists makes Hernandez de Cos the favourite. "She has been presiding over a euro zone which has been incredibly weak. It would be very interesting to see who replaces her," David Morrison, senior market analyst at Trade Nation, told Reuters.

A rate decision on the same day

The ECB policy decision is due at 1315 GMT on Thursday, with her regular press conference at 1345 GMT. The bank is widely expected to keep its deposit rate at 2.5 percent, while signalling that another increase, potentially as soon as December, remains likely.

The ECB is in the middle of a rate hiking cycle, seeking to prevent an oil price shock linked to the Iran war from feeding into other prices and wages. A surge in government bond yields, especially in France, has also pushed up borrowing costs for households and businesses.

Markets took the morning in stride. The pan-European STOXX 600 index rose 0.40 percent to 646.69 points by 1034 GMT, its highest since early September. Shell climbed 3.4 percent to a record high after reporting its highest quarterly profit since 2022 and raising its share buybacks.