Eight months is not a long time in central banking, but it may be long enough to change the course of European politics. On Monday, Christine Lagarde told the European Central Bank's Governing Council and European Council President António Costa that she will leave her post on 7 February 2027. Her term, which began on 1 November 2019, would normally have run until the end of October 2027. No reason was given, and the ECB's statement was brief.

The most common explanation, however, is political rather than personal. French elections are due in the spring, and a victory for the eurosceptic far right is a real possibility. If Lagarde left later, the choice of her successor could fall to a European Council shaped by that result. By departing early, she allows the leaders of the 21 eurozone countries, who appoint the ECB president, to decide before French voters do.

Costa said the selection process would begin immediately and proceed "without delay". The timing is awkward in other ways. The bank meets on Thursday and is expected to hold its deposit rate at 2.5%, while signalling that a further rise is likely before the year ends.

It has already raised rates twice since June to contain inflation driven by the energy shock of the Iran war.