From 3% to 2.4%. The Minister of the Economy, Éric Lombard, had very recently announced a reduction in the Livret A rate of 0.5 points from February 1, forecasting a rate “around 2.5%”. The Bank of France finally proposed a very close value this Wednesday, suggesting increasing this rate to 2.4%, due to the slowdown in inflation.
The governor of the Bank of France, François Villeroy de Galhau, also suggested reducing the rate of the Popular Savings Booklet (LEP), reserved for low-income households, to 3.5%, compared to 4% today.
Increase “financing of social housing”
This new rate for the Livret A, the compass of French savings, “will make it possible to amplify the very positive movement to revive the financing of social housing and local authorities observed for more than a year”, writes the Banque de France in a press release.
Its governor was waiting for the final figure for December inflation given this Wednesday morning by INSEE, the last essential component for calculating the new rate of the flagship regulated savings product, to deliver his proposal. The National Institute of Statistics finally announced that consumer prices have slowed very sharply on an annual average in 2024, to + 2%, breaking with two years marked by high inflation, following the outbreak of the war in Ukraine. .
It is now up to the Minister of the Economy to arbitrate the final decision and approve these rates, which will come into force on February 1. This is the first reduction in the Livret A rate since the start of 2020, when this rate went from 0.75% to 0.50%. We have to go back to 2009 to find a larger drop, greater than 0.6 percentage points.
Even with a less profitable A savings account, “savings are not only protected, but they allow real assets to increase”, assured Éric Lombard last week.
A “very significant” drop for the Caisse des Dépôts
The rate of Livret A, held by 57 million French people, is theoretically revised every six months. But it had been frozen at 3% until the end of January 2025 by the former Minister of the Economy, Bruno Le Maire.
-The prospect of a drop in the rate offers a breath of fresh air to the players who pay it: the banking establishments and the Caisse des Dépôts (CDC), which Éric Lombard headed until his appointment as minister at the end of December. The consequence of a rate cut “is very important for us”, underlined last Wednesday on BFM Business the interim general director of the “Caisse” Olivier Sichel. “This will allow us to lower the borrowing rate of social landlords,” he argued.
This expected drop will also be viewed favorably by insurers, who offer a competing savings product, life insurance.
The sums deposited in the A savings accounts as well as in the Sustainable and Solidarity Development Savings Accounts (LDDS) are 59.5% managed by the CDC and intended mainly to finance social housing. These booklets increased by 17.5 billion euros between January and November 2024, reaching an outstanding amount of 582.3 billion euros, according to the latest data from the CDC.
“Essential to continue this momentum” on LEP
As for the LEP, if the governor of the Banque de France strictly applied the calculation formula for the rate of the livret A, he wished to deviate from it for the rate of this savings book accessible under income conditions, in order to avoid a drastic fall. Thus, the rate proposed for the LEP on February 1 is 3.5% instead of the theoretical 2.9%, according to the calculation formula.
“It is essential to continue this momentum in favor of popular savings,” insists the Banque de France in its press release. The number of LEP holders stood at 11.8 million at the end of 2024, a record, but still far from the 19 million eligible.
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