Show caption: Christine Lagarde, President of the European Central Bank, h…
The financial institution is seeking to prevent an oil-price shock linked to the Iran war
The National
October 29, 2026
- Christine Lagarde resigned as European Central Bank president on Thursday, ending months of speculation about her future.
- She will step down on February 7, 2027, ahead of her term's scheduled end in October 2027.
- Klaas Knot and Pablo Hernandez de Cos, former central bank governors of the Netherlands and Spain respectively, are frontrunners to succeed her.
- The ECB is navigating a rate-hiking cycle amid an oil-price shock linked to the Iran war, with its deposit rate expected to hold at 2.5 per cent.
- "I leave this institution with a sense of good work done and an ECB that is fit for the future," the ECB president said.
European Central Bank President Christine Lagarde announced her resignation on Thursday, ending months of speculation about her future just as Europe enters a period of rising economic volatility and divisive electoral politics.
Ms Lagarde will step down on February 7, giving 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. As ECB president, Ms lagarde was expected to remain neutral to safeguard the institution's independence.
"European Central Bank President Christine Lagarde today informed the Governing Council and the President of the European Council António Costa that she will step down from her position on 7 February 2027," the ECB said in a press release.
"I leave this institution with a sense of good work done and an ECB that is fit for the future," Ms Lagarde said in a short video shared on social media.
European Council President Antonio Costa said in a statement the process to find a successor for Lagarde would begin immediately.
The former central bank governors of the Netherlands and Spain, Klaas Knot and Pablo Hernandez de Cos, are seen as frontrunners to replace Ms Lagarde.
Show caption: Former central bank governor of the Netherlands Klaas Knot i…
Ms Lagarde's term was scheduled to run until the end of October 2027 but speculation about an early departure had been mounting for months, with the World Economic Forum seen as a likely destination.
The move comes as 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.
But it must also contend with a surge in government bond yields — especially in debt-laden France — that has pushed up borrowing costs for households and businesses and which Lagarde has said will curb growth and inflation.
Caught between persistent inflation fuelled by a renewed surge in energy costs and deteriorating financing conditions, the ECB is widely expected to keep its deposit rate at 2.5 per cent on Thursday while signalling that another increase, potentially as soon as December, remains likely.
The ECB is due to announce its interest rate decision today.
Agencies contributed to this report
Updated:
October 29, 2026, 11:38 AM
Source: The National
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