Bad news for savers. The interest rate of the Livret A and the sustainable development booklet (LDD) will not increase on May 1, 2023, according to information from the Parisian confirmed to Figaro. While it benefited from an exceptional increase in early February, rising to 3%, a further increase could have been envisaged in the spring. But the next one will finally take place in August.
The livret A, a remunerated savings account where the French can invest their money at an interest rate fixed by the State, takes into account the general and lasting increase in prices. “The return of inflation mechanically leads to the revision of the interest rate of the livret A”, explains the Ministry of the Economy. The rate is then calculated on the basis of short-term monetary interest rates and inflation over the last six months.
The interest rate for regulated savings books is set twice a year: on February 1 and August 1. A first revision was made in February 2022, when the rate was raised to 1%, then 2% in August 2022. In February 2023, it had reached a record level for 15 years, at 3%, on the recommendations of the governor of the Bank of France. However, this rate may be revised in May and November, according to a decree of January 27, 2021. It stipulates that “on April 15 and October 15 of each year, if the Banque de France estimates that the variation in inflation or monetary markets justifies it, the Governor of the Banque de France may propose […] to revise the rates […], on 1 May or 1 November”.
Except that recently, the Governor of the Banque de France has not proposed such a revision despite the rise in prices which weighs on the daily life of the French. “Under the decree of January 27, 2021 relating to the interest rates of regulated savings products, only the Governor of the Banque de France can propose an interim revision of the rate of the Livret A and the LDSS, on May 1” , replied the Ministry of the Economy to Figaro. These intermediate revisions intervene only “in the event of an exceptional variation in inflation or short-term interest rates compared to the date of the previous revision”, he specifies. In February, consumer prices increased by 6.2% in one year, and stabilized in March at 4.5%, according to provisional data from INSEE.
In February, the 3% rate should have been raised to 3.30% by strictly applying the formula. But the governor of the Banque de France can, according to the decree of January 27, 2021, adjust this rate “in the event of exceptional circumstances”. According to him, too high a rate would have been “unfavorable to the cost of financing the economy”, especially for social housing and urban policy.
