Christine Lagarde resigns as ECB head, effective February 7, 2027

Christine Lagarde announced she will leave the European Central Bank on 7 February 2027, ending her seven‑year tenure a few months early. The ECB said she informed the Governing Council and European Council President Antonio Costa of her decision, and Costa said a search for her replacement will begin immediately.

Lagarde’s term was set to run until the end of October 2027. Her early exit comes as the bank prepares for a key policy meeting this week, and it has sparked speculation that she wants a successor chosen before France’s spring elections, which could bring a far‑right, eurosceptic government. The timing also coincides with mounting pressure over France’s deteriorating public finances, a issue likely to dominate the upcoming discussion.

European Council President Costa praised Lagarde’s “steady and determined stewardship” through a pandemic, a war in Europe, energy crises and inflation shocks. In a short video, Lagarde said she leaves the ECB “fit for the future” and satisfied with her record. The ECB is expected to keep its deposit rate at 2.5 % at the Thursday meeting, while signalling another hike before year‑end. French bond yields have risen to a 25‑year high amid a budget deadlock, and recent protests over public spending have turned violent. Analysts are watching whether the bank might use the Transmission Protection Instrument for the first time to buy government bonds and ease the fiscal strain.

The successor hunt will now move swiftly, with the 21 euro‑zone leaders expected to name a new president before the end of the year. A smooth transition is seen as crucial for maintaining confidence in the euro area as inflation remains sticky and political uncertainty looms in France. Market participants will be watching both the rate decision and the leadership change for clues on the ECB’s future direction.