Europe’s central bank chief Christine Lagarde to step down nine months early

The European Central Bank announced on Thursday morning that Lagarde would step down as its president on 7 February 2027; her term was scheduled to run until the end of October next year. The ECB's governing council thanked Lagarde warmly and gave her a long standing ovation, as it met to set interest rates across the eurozone.

Succession race begins

Lagarde's early departure fires the starting gun on the race to replace her as ECB chief, at a time when the eurozone is struggling with weak growth and above-target inflation. Potential candidates include the former Dutch central bank president Klaas Knot, the Spanish banker Pablo Hernández de Cos, German central bank chief Joachim Nagel, and Nadia Calviño, the president of the European Investment Bank.

Challenging tenure

Lagarde joined the ECB in late 2019, shortly before the start of the Covid pandemic. During her tenure the ECB has also faced the economic consequences of the Ukraine and Iran wars, and Donald Trump's trade war.

The ECB is widely expected to keep interest rates on hold on Thursday afternoon.

WEF speculation

Lagarde has been seen as a candidate to take over the running of the World Economic Forum (WEF), which holds its annual meeting in Davos each January. The WEF founder, Klaus Schwab, stepped down last year after being accused of financial and ethical misconduct – which he denies.