Change expected on February 1 for the French: the Livret A rate, which has not fallen since 2020, should fall from 3% to 2.5% due to the decline in inflation.
Fixed at 3% since the start of 2023, the Livret A rate could potentially drop 0.5 percentage points at the start of the year, Eric Lombard said in October, when he was still general director of the Caisse des Dépôts (CDC), before he was appointed Minister of the Economy at the end of December.
The formula for calculating the Livret A rate, also valid for the Sustainable and Solidarity Development Booklet (LDDS), is based half on the evolution of prices over the last six months and the other half on an exchange rate between banks.
In mid-January, as soon as the final inflation figures for December are known, the governor of the Bank of France will propose a new rate to Bercy, based on the result of the calculation formula or by deviating from it.
“2.5% seems to me the most likely rate for the Livret A as of February 1,” Philippe Crevel, director of the Cercle de l’Epargne think tank, told AFP on Tuesday.
Another consequence of the drop in inflation, the rate of the Popular Savings Book, reserved for low-income individuals, should also fall, “from 4% to 3% if we apply the formula” according to him.
According to Philippe Crevel, this probable rate cut would serve a dual government objective.
On the one hand, revive consumption to stimulate growth and tax revenues, particularly via VAT.
On the other hand, supporting a building sector in crisis: “The Livret A resources serve as a basis for loans made to social landlords. The higher the Livret A rate, the higher the loan rate,” explains Mr. Crevel.
The household savings rate was at 18.2% of gross disposable income in the third quarter of 2024, according to the latest available figures, three points above the pre-Covid average.
“So Eric Lombard’s objective, like that of his predecessors, is for there to be a little more consumption and a little less savings,” concludes the specialist.
Swiss
