Christine Lagarde hits back at ‘irrelevant’ criticism of leadership

In an internal survey, Ms Lagarde was found to have performed ‘poorly’ or ‘very poorly’ by a majority of staff – KIRILL KUDRYAVTSEV/AFP

Christine Lagarde has said criticism of her leadership is ‘irrelevant’, as she hit back at claims she is a poor central banker.

The president of the European Central Bank (ECB) made the comments after she was found to have performed “poorly” or “very poorly” by 50.6pc of staff in an internal survey, with concerns raised over how uses the role to boost her political agenda.

However, when asked about the survey on Thursday, Ms Lagarde rejected talk of widespread unhappiness.

“As far as I am concerned, I am irrelevant,” she said at an ECB press conference.

“As long as I deliver on leading this institution of talented people – not just economists, talented people – who are driven to do their job and to deliver. The rest, me as a person: irrelevant.”

She listed other internal surveys which show that 80pc of those who responded said they are happy, adding that more than three-quarters said they would recommend the ECB as a workplace to a friend.

Ms Lagarde added: “We ask lots of other questions about satisfaction, dissatisfaction, dignity at work and all the rest of it, and we pay great attention to these technically sound responses, and we act upon them, and we will continue to do so.

“What keeps me going is those answers, and I am extremely proud of the staff of the ECB, and I am very proud and honoured to lead the institution, because we are driven by a mission, delivering price stability, but serving the Europeans, and we will continue doing that.”

Her comments came as the ECB’s governing council voted to keep interest rates on hold, including the deposit rate – which is at a record 4pc high.

Ms Lagarde said it is still too “premature to discuss rate cuts”, despite markets betting that inflation will fall.

The president of the central bank also acknowledged that the eurozone economy is likely to have stagnated in the final quarter of 2023, with continued weakness in the near term.

But she added that “some forward-looking survey indicators point to a pick-up in growth further ahead”.

Ms Lagarde said that the ECB will wait for more data from the jobs market before making any rate cuts, particularly as many pay decisions are made in the first few months of the year.

This is key to seeing how much pressure rising wages might put on inflation, as the ECB still needs to get price rises to its 2pc target, down from December’s rate of 2.9pc.

She added that there are risks to inflation from tensions in the Middle East.

Houthi attacks on shipping in the Red Sea have forced shipping lines to take freight carriers around the Cape of Good Hope instead of the Suez Canal, causing delays and extra expense. There are also fears over oil and gas prices.

Carsten Brzeski, economist at ING, predicted there will be no rate cuts before the summer.

“The job of bringing inflation back to target is not done yet,” he said.

“As long as actual inflation remains closer to 3pc than 2pc, the ECB will not look into possible rate cuts. It would require a severe recession or a sharp drop in longer-term inflation forecasts to clearly below 2pc to see a rate cut in the coming months.

“We continue to believe that a first rate cut will not come before June.”

Separately, fresh data showed the US economy grew more quickly than expected in the final three months of 2023, expanding at an annualised pace of 3.3pc as households kept spending.

While growth decelerated from 4.9pc in the third quarter, the healthy expansion adds to evidence the US economy is withstanding higher interest rates. The figures bolster hopes of a “soft landing” where inflation can be brought under control without triggering a recession.

David Page, economist at Axa Investment Managers, said continued strong growth may push the Federal Reserve to hold off from cutting interest rates.

He said: “We doubt that the Fed will be sufficiently comfortable that inflation is on track while growth remains robust.

“We continue to forecast a more cautious easing in policy from the Fed, pencilling in a June first cut, taking rates to 4.75pc from 5.5pc by year-end.”

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