European Central Bank

Christine Lagarde, president of the European Central Bank, will step down on 7 February 2027, about nine months before her eight-year term ends on 31 October 2027. Sources say she wants freedom to speak on matters beyond monetary policy, including French and global politics. The European Council has started the search for a successor, with former central bank governors Klaas Knot of the Netherlands and Pablo Hernandez de Cos of Spain seen as front-runners. Eurozone inflation is running at almost double the bank's two per cent target.

The Chancellor has sent a letter to the Governor of the Bank of England setting out the remit for the Monetary Policy Committee, according to the Bank of England. The document is titled Remit for the Monetary Policy Committee, October 2026. Separately, the Bank of England reports that regulators have announced plans to simplify the Senior Manager and Certification Regime, a framework governing accountability and conduct in UK financial firms. The announcements were published on 28 Oct.

The European Central Bank kept its deposit rate unchanged at 2.5 percent on 29 Oct, with the Governing Council deciding unanimously to hold. Eurozone headline inflation rose to 3.8 percent in September, its highest level since September 2023, driven by energy prices that climbed 18.8 percent amid Middle East turbulence. The ECB said risks to inflation are skewed to the upside. Christine Lagarde, the ECB president, announced she will step down early in February 2027. Markets priced in about a 67 percent chance of a rate increase in December.