European Central Bank President Christine Lagarde announced her resignation on Thursday, ending months of speculation about her future at a complex juncture for Europe and the ECB.
Lagarde will step down on February 7, giving current European Union 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.
“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.
The former central bank governors of the Netherlands and
Spain, Klaas Knot and Pablo Hernandez de Cos, are seen as
frontrunners to replace Lagarde.
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% on
Thursday while signalling that another increase, potentially as
soon as December, remains likely.
The ECB is due to announce its interest rate decision at
1315 GMT on Thursday, followed by Lagarde’s regular press
conference at 1345 GMT.
Source: Khaleej Times