The return on the French's preferred investment is today set at 3%.
Bad news for savers. The Livret A rate, currently 3%, will fall “around 2.5%” on February 1, announced this Monday the Minister of the Economy Éric Lombard, who is still awaiting the proposal from the governor of the Bank of France to specify this figure.
“The governor of the Bank of France François Villeroy de Galhau will make a proposal to the Minister of Finance, most certainly a reduction”and it is “around 2.5% (…) that the decision will be made”said Éric Lombard on France Inter. “The Livret A rate will fall, but inflation has fallen sharply since it is around 1%”recalled the minister.
Inflation at 1.3%
The consumer price index fell to 1.3% in November year-on-year, compared to 3.5% a year earlier. Even with a less profitable Livret A, “savings are not only protected but they allow real assets to increase”he justified. The Livret A rate, which has not seen a drop since 2020, has been set at 3% since the start of 2023.
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.
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