The Livret A rate will drop to 2.4% on February 1, compared to 3% currently, following a decision on Wednesday by the Ministry of the Economy, which on the other hand granted a “boost” to the twelve million savers. modest holders of a Popular Savings Account, which will earn them 3.5%.
“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 recorded over the last six months.
He had prepared people's minds by mentioning a rate “around 2.5%” last week.
The drop, unprecedented since the start of 2020 and in its magnitude since 2009, reflects the slowdown in price increases last year.
“Offering a better rate than what the formula implies was justified especially when inflation was high,” however, observed in a note the director of economic studies at the IESEG School of Management Eric Dor.
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 exemptions in recent years.
Consume rather than save
The drop in the Livret A rate offers a breath of fresh air to the players who pay for it: the banks (Jefferies analysts have also welcomed a “good surprise” for the latter's margin) and the Caisse des Dépôts (CDC ) which Éric Lombard led until his appointment as minister at the end of December.
“This rate cut is good news for housing, because it will stimulate the construction of social housing, which is a priority for this government,” said Mr. Lombard.
The majority of the sums deposited in Livret A and LDDS funds are intended to finance social housing and urban policy, via the “Caisse”.
“This reduction will make it possible to support investment, a major challenge in a context of an unprecedented housing crisis,” the federation of social enterprises for housing (ESH) welcomed in a press release.
“Lenders who are facing rising production costs and major renovation challenges need it,” added Emmanuelle Cosse, president of the Social Union for Habitat (USH).
This drop in the rate will also be viewed favorably by insurers, who sell a competing savings product, life insurance.
The government “wishes (…) to encourage household consumption which has been sluggish for months”, analyzes Philippe Crevel, director of the Savings Circle.
“However, the drop in the Livret A rate does not always mean the spring of consumption, which is driven by psychological factors,” he points out.
Livret A and LDDS were filled with an additional 17.5 billion euros between January and November 2024, to reach an outstanding amount of 582.3 billion euros, according to the latest data from the CDC.
A boost for LEP
If the calculation formula was strictly applied for the Livret A rate, the Popular Savings Booklet (LEP) benefited from a “boost”: it will go down from 4% to 3.5% instead of 2 .9% theoretically predicted.
“It is essential to continue this momentum in favor of popular savings,” Mr. Villeroy de Galhau justified Wednesday before the Senate Finance Committee.
The number of holders of this booklet, accessible under income conditions, tends to plateau: it stood at 11.8 million at the end of 2024, far from the 19 million households who could qualify for it.
The Banque de France aims to open one million more this year.
“Banks can and must do even better” to market this product, the governor stressed to the senators. On their own, banking establishments are only timidly participating in the development of LEP.
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