The Ministry of the Economy followed the recommendations of the Banque de France by ratifying on Wednesday a reduction in the Livret A rate to 2.4% on February 1, against 3% currently, and by granting a “boost” to the rate of the Popular Savings Booklet (LEP), set at 3.5% and reserved for low-income households.
“After the drop in inflation, these new rates protect the savings of the French,” declared Minister Eric Lombard, quoted in a press release.
The tenant of Bercy, like earlier in the day the governor of the Bank of France François Villeroy de Galhau, chose to stick to the strict calculation of the formula when setting the Livret A rate, integrating half of the inflation observed over the last six months.
Frequent exemptions in recent years
The drop, unprecedented since the beginning of 2020 and in its magnitude since 2009, is logical since the increase in prices slowed down last year.
“Offering a better rate than what the formula implies was justified especially as inflation was high“, however, observed in a note the director of economic studies at the IESEG School of Management Eric Dor.
The fixing of the Livret A rate, reviewed twice a year and also valid for the Sustainable and Solidarity Development Booklet (LDDS), is eminently political and has been the subject of frequent exceptions in recent years.
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