Annual inflation, calculated from monthly levels of price increases over 12 months, was limited this year to 2%.
A figure was missing and, this Tuesday, INSEE made it public. In December, the 12-month price increase amounted to 1.3%. Beyond the stabilization at this low level that this announcement reveals, we can finally calculate the only level of inflation which will remain the historical reference for the year 2024: 2%.
What does this 2% correspond to? The average monthly price increase from January to December compared to the same months of the previous year. And this 2% is good news, not only because inflation will have fallen considerably last year. But because France will have returned in 2024 to the level of inflation that the European Central Bank judges to be optimal.
Landlords allowed to increase their rent by 2%
More broadly, to be considered favorable to the economic prosperity of the country, inflation must be within a range of 1 to 3%. Which means that 0.5% in 2020 was not enough. And obviously, 5.2% in 2022 and 4.9% in 2023 was far too much.
But beyond its role as a thermometer of the economy, what is this annual inflation figure for? To revalue each year the amounts for which it is agreed to take into account inflation. This concerns social benefits (not only pensions), the income tax scale (which cannot be implemented for the moment due to lack of budget) but also rents.
Thus, landlords are authorized to increase their rent by 2% this year. And then, we should not forget that this annual inflation is one of the elements taken into account to revise the rate of the Livret A. Its rate must increase on February 1 to 2.5%. Enough to clearly protect your savings from inflation.
France
