FRANKFURT, Germany: European Central Bank President Christine Lagarde will leave her post more than eight months before the end of her term, saying the neutrality required by the position was preventing her from speaking out on matters of importance beyond monetary policy.

Lagarde said she would step down on February 7, 2027. Her term had been due to expire in October 2027.

Her departure will give current European Union leaders time to choose a successor before the French presidential election next spring.

Lagarde's decision ends months of speculation about her future as Europe faces rising economic volatility and divisive electoral politics, particularly in her native France.

The announcement came just before the ECB left interest rates unchanged while maintaining expectations for another hike in December, warning that high and rising energy costs were increasing inflation risks.

Asked why she was leaving after previously saying she could not depart with inflationary clouds on the horizon, Lagarde said the neutrality required by her position meant she could not speak out on issues affecting Europe and elsewhere.

"I don't think that I can remain neutral," Lagarde told a press conference after the ECB's policy decision.

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

Lagarde informed her ECB colleagues of her decision after their two-day policy meeting concluded. According to a source who was present, she became choked with emotion several times while reading a resignation message.

She did not specify which issues she wished to speak out on and did not respond to questions about whether she had deliberately decided to leave early so her successor could be chosen before the French election.

French President Emmanuel Macron, who will help choose the next ECB president, thanked Lagarde for her service and called for a coordinated succession process.

"The transition in the leadership of the ECB must now be prepared in an orderly and balanced manner, in coordination with our European partners," Macron said.

European Council President Antonio Costa said the process of finding Lagarde's successor would begin immediately.

The appointment is likely to form part of a broader package of senior ECB appointments involving the executive board seat of Isabel Schnabel, who will leave in early January, and chief economist Philip Lane, who is due to depart in May.

Former central bank governors Klaas Knot of the Netherlands and Pablo Hernandez de Cos of Spain are widely seen as frontrunners to replace Lagarde.

"The rumoured successors are both very competent, well established central bankers, so for markets, it won't matter too much," Danske Bank economist Piet Haines Christiansen said.

Financial markets showed little reaction to Lagarde's announcement, with some analysts saying the ECB had established a reputation that extended beyond any individual leader.

"The ECB is now quite well established, the market is familiar with the way it operates," Goldman Sachs' head of Fixed Income Macro Investing Simon Dangoor said. "Our view is that institutional behaviour is likely to outlast Lagarde, and be quite similar, whoever takes over."

Speculation that Lagarde would leave the ECB early had been building for months, with the World Economic Forum seen as a possible destination. The WEF declined to comment.