ECB’s Lagarde says AI is boosting productivity with no signs of mass layoffs

Summary

European Central Bank President Christine Lagarde said artificial intelligence is currently improving productivity across the euro area without triggering widespread job losses, though policymakers remain watchful for longer-term effects.

FRANKFURT, Feb. 26, 2026 — Christine Lagarde, President of the European Central Bank, said artificial intelligence is so far acting as a productivity driver rather than a source of widespread unemployment in the euro zone.

Speaking to members of the European Parliament, Lagarde said the ECB has not observed evidence of large-scale layoffs linked directly to AI adoption, even as businesses increasingly integrate automation into operations.

Productivity gains without labour-market shock

Lagarde noted that early indicators suggest AI is helping firms operate more efficiently, contributing to productivity improvements rather than immediate job displacement.

However, she emphasized that the ECB continues to monitor labour-market developments closely as technological adoption accelerates.

Implications for economic policy

For policymakers, productivity gains without rising unemployment could support economic growth while easing inflationary pressures — a scenario central banks generally view positively.

Still, Lagarde cautioned that the longer-term effects of AI remain uncertain, particularly if skills mismatches emerge as technology evolves.

A cautious outlook

The ECB’s assessment reflects the early stage of AI integration across the economy. While the immediate impact appears limited in terms of job losses, economists expect structural changes in labour markets over time.

Lagarde said the central bank will remain attentive to future data to better understand how automation may reshape employment dynamics.

Why this matters

Central banks are closely studying AI’s economic impact because productivity, wages, and employment trends influence inflation and monetary policy decisions.

If AI boosts efficiency without reducing jobs, it could support sustainable growth — but any shift toward structural unemployment would pose new policy challenges.

FAQs

Q1. What did Lagarde say about AI and jobs?

She said AI is currently improving productivity without causing widespread layoffs.

Q2. Is the ECB concerned about future job losses?

Yes, the bank is monitoring labour-market data closely as AI adoption increases.

Q3. Why is this important for monetary policy?

Employment and productivity trends influence inflation and interest-rate decisions.

Q4. Does this mean AI won’t affect jobs?

Not necessarily — the long-term impact remains uncertain.

Q5. What is the ECB watching next?

Indicators such as wages, employment levels, and productivity growth.