The preferred investment of the French, the Livret A should see its rate lowered from February 1, 2025.
It is expected to fall by 0.5%, from 3% to 2.5%.
This probable decline should help boost consumption and support the construction sector.
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This is one of the indirect consequences of the decline in inflation. As of February 1, 2025, the Livret A rate, which has not fallen since 2020, should fall from 3% to 2.5%. Fixed at 3% since the start of 2023, the rate of the most used investment in France could potentially drop 0.5 percentage points at the start of the year, as Eric Lombard said in October, when he was still general director of the Caisse des Dépôts (CDC), before he was appointed Minister of the Economy on Monday December 23.
The formula for calculating the 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 the 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.
A dual government objective
“2.5% seems to me the most likely rate for Livret A as of February 1”indicated Tuesday, December 31 to AFP Philippe Crevel, director of the Cercle de l’Épargne think tank. Another consequence of the drop in inflation, the rate of the Popular Savings Book, reserved for low-income individuals, should also fall, “from 4% to 3% if we apply the formula”.
According to Philippe Crevel, this probable rate cut would serve a dual government objective. On the one hand, revive consumption to stimulate growth and tax revenues, particularly via VAT. On the other, support a construction sector in crisis. “Livret A resources serve as the basis for loans made to social landlords. The higher the Livret A rate, the higher the loan rate.”explains the director of the Cercle de l’Épargne.
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The household savings rate was 18.2% of gross disposable income in the 3rd quarter of 2024, according to available figures, three points above the pre-Covid average. According to the specialist, “Eric Lombard's objective, like that of his predecessors, is for there to be a little more consumption and a little less saving.”
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