FRANKFURT — Christine Lagarde will leave the European Central Bank on 7 February 2027, the bank said on Thursday, ending her eight-year term nearly nine months early and opening a contest for the euro zone's most powerful economic job more than a year ahead of schedule.

Lagarde, 70, confirmed the decision at her news conference after the ECB's October rate meeting. She said she had brought her departure forward because she wanted more room to speak about matters that have nothing to do with interest rates.

"The reason I'm anticipating the end of my term by leaving in February 2027 instead of October is, as I have said to colleagues, members of staff and governors, is because I want to have the freedom of speech, the freedom of expression and the freedom to engage on matters that are not monetary policy matters," she said.

Her term had been due to run to October 2027. Going in February hands the choice to the EU leaders in office now, before French voters pick a president in the spring.

She said the job carried an obligation of neutrality, the price the bank pays for being independent.

"I don't think that I can remain neutral; I don't think that I can be comfortable in that neutrality, at the present time," she said, adding that she was "interested in the truth, and I see the truth being very often damaged, contradicted by misrepresentation."

In a short video shared on social media, she said she was leaving "with a sense of good work done and an ECB that is fit for the future."

Antonio Costa, the president of the European Council, praised what he called her steady and determined stewardship through a pandemic, a war in Europe, energy crises and inflation shocks. He said the appointment of her successor would be initiated that day and proceed without delay.

The decision rests with the European Council in its euro-area composition under Article 283(2), by qualified majority, on a recommendation from euro-zone finance ministers. The Irish Times reported that a new member of the bank's executive board needs the support of at least 16 of the 21 euro-area countries, representing 65 per cent of the bloc's population.

Two names lead the early speculation. The Dutch government is behind Klaas Knot, who ran the Netherlands' central bank from 2011 until 2025 and chaired the Group of 20's Financial Stability Board. Madrid nominated Pablo Hernandez de Cos in July, according to Euronews; he was governor of the Bank of Spain from 2018 to 2024 and is now general manager of the Bank for International Settlements. Euronews also named Bundesbank president Joachim Nagel.

Much of the calculation turns on France, where bond yields have risen and the spread over German debt is the widest since the euro zone's sovereign debt crisis of the early 2010s. Holger Schmieding, chief economist at Berenberg, wrote in a note that Knot's record on financial stability may give him an edge, and added that the ECB "has no mandate and no appetite to fund French fiscal follies."

Felix Feather, an economist at Aberdeen Investments, said an early exit means the new French president "will have no role in choosing the next ECB president."

Markus Ferber, a German member of the European Parliament from the centre-right European People's Party, said the decision sent "the wrong signal".

"If the impression arises that such a departure is timed around national elections, it damages trust in an institution that must stand above any domestic political calculation," said Ferber, who sits on the parliamentary committee that will confirm her successor.

Paul De Grauwe, a professor at the London School of Economics, said the move was "debasing the institution and just following the purely political calculus of the French President." Marcel Fratzscher, president of the German research institute DIW, took the opposite view, saying Lagarde was showing "a strong sense of responsibility towards Europe".

Lagarde has repeatedly played down any suggestion that she will run for the French presidency. The Irish Times reported that she has been in talks about chairing the World Economic Forum, and that she is only the second ECB president to leave early, after Wim Duisenberg.

She has led the bank since November 2019, through the pandemic, the war in Ukraine and energy shocks that pushed EU inflation above 11 per cent in 2022, CNBC reported.

The bank faces other changes at the top. Executive board member Isabel Schnabel leaves on 3 January to join the International Monetary Fund, and the deadline for applications to replace her has been pushed back to 27 November. Chief economist Philip Lane's term ends on 31 May.

Financial markets moved little. Simon Dangoor of Goldman Sachs said institutional behaviour at the ECB was "likely to outlast Lagarde, and be quite similar, whoever takes over."

The Governing Council held its deposit rate at 2.5 per cent on Thursday and signalled that another increase remains likely, as it tries to stop an oil price shock linked to the Iran war from feeding into other prices and wages. Oliver Rakau of Oxford Economics said there was "likely a low bar to another hike in December." Money markets are pricing another three increases by the end of next year, which would take the deposit rate to 3.25 per cent. France votes in the first round of its presidential election in April.