Despite inflation, the Banque de France proposed to the government, this Thursday, July 13, to maintain the rate of remuneration of the Livret A at 3% until 2025. Guest of the 1 p.m. newspaper of TF1, the Minister of the Economy , Bruno Le Maire, confirmed that he would follow the recommendation of the institution. A higher rate would have increased “the cost of credit for SMEs, which need to invest” as well as that of “credit for social housing”, i.e. “tens of thousands of social housing units” less, he said. he argued. The Minister also announced an increase in the ceiling of the People’s Savings Book (LEP), reserved for the most modest households, from 7,700 euros to 10,000 euros.
If we stick to the planned calculation formula, which takes into account on the one hand the rise in prices and on the other hand the interbank rates of the last few months – at which the banks exchange money at short term – the rate should rather be between 4% and 4.1%, according to the experts. But the authorities have the possibility of derogating from this formula in the event of circumstances deemed exceptional. This is what happened in February 2022 when the Banque de France proposed rounding to 1%, instead of 0.8%, then in February 2023, but in the other direction this time, when the institution had proposed 3% instead of 3.3%.
According to this text, two reasons played a role in this decision: inflation, which is falling and could generate volatility in the rate in the months to come, and the fact that “the rate is too high, while regulated savings have no “equivalent among our European neighbors, would be detrimental to our economic activity and growth”, according to the press release from the Central Bank.
Several players, such as the Caisse des dépôts et consignations (CDC), which manages 60% of the amounts deposited by the approximately 55 million French people holding a Livret A, and the Social Union for Housing had recently pleaded for a hold at 3%.
Increase in the yield of LEP?
“We must preserve the interests of savers on the one hand, of course, and on the other an ultra-sensitive sector for the French, which is the housing sector, because the Livret A is used to finance social housing in particular and more broadly, mortgages,” the governor of the Banque de France, François Villeroy de Galhau, recalled on franceinfo on Tuesday.
To better pass the pill to the 55 million or so Livret A holders, the governor has however proposed that this rate, normally revised every six months, be maintained until January 2025, thus avoiding a potential drop in here there.
For his part, the Governor of the Banque de France also proposed to set the yield of the People’s Savings Book (LEP), reserved for low-income households, at 6% instead of the 5.6% provided for by the formula. It is now at 6.1%. While half of LEP holders have reached the ceiling of 7,700 euros, according to the Banque de France, it has also been proposed to raise it to 10,000 euros.