Lagarde to leave ECB

The European Central Bank (ECB) is preparing for a leadership change early next year, with its president Christine Lagarde set to depart before the end of her current term.

Lagarde has informed the ECB's Governing Council and European Council President Antonio Costa that she will step down on 7 February 2027.

Lagarde took office on 1 November 2019, succeeding Mario Draghi. She would have served just over seven years as ECB president when she steps down.

Before joining the central bank, she was managing director of the International Monetary Fund from 2011 to 2019, having previously served as France's finance minister under former president Nicolas Sarkozy.

Her successor will be appointed by the European Council following a nomination process under Article 283 of the Treaty on the Functioning of the European Union. The Governing Council acknowledged her departure with a standing ovation.

The announcement comes as the central bank navigates renewed inflation pressures and tighter financing conditions across the Euro Area.

In its latest Survey on the Access to Finance of Enterprises, covering the third quarter of 2026, the ECB found businesses were facing further increases in borrowing costs and reduced access to bank lending.

A net 46% of firms reported higher interest rates on bank loans, up from 42% in the previous quarter.

Large businesses were more likely to report increases, with a net 55% experiencing higher rates, compared with 38% of small and medium-sized enterprises.

Loan availability also deteriorated, with a net 5% of firms reporting reduced access to bank finance. The decline outpaced changes in borrowing demand, leaving the financing gap indicator positive at 2%.

Businesses continued to identify the broader economic outlook as the main constraint on external financing, while more firms expected credit availability to weaken over the coming three months.

The findings follow the ECB's September decision to lift its deposit facility rate by 25 basis points to 2.5%, its second increase since the outbreak of the Iran war, as energy-related inflation risks intensified.