Are the French still those wise ants who, as during confinement, put money aside during each period of uncertainty? Or do they break the bank with the return of inflation in order to maintain their standard of living?
Crazy dough
“For the moment, households are not digging into their Covid savings”, notes François Villeroy de Galhau, the Governor of the Banque de France, on the occasion of the presentation on Tuesday July 19 of the annual report on the regulated savings of the French people (passbook A, popular savings account, etc.). If they do not fall into the excess savings of confinements, the French do not turn into cicadas. Precaution is in order.
The 56 million booklets A, preferred investment of the French, are the privileged witness: their outstanding amount increased in 2021, despite the high point already reached the previous year. It accommodates 225 billion euros, nearly 50 billion more than the average of the last twelve years. The first banker of France estimates that it is probable that the deposits on the booklet A “increase” again in the months to come.
Economic uncertainty has overcome fears linked to inflation (+5.8% in June, according to INSEE). The remuneration of the booklet A will be increased to 2% in August, before a very likely new increase in early 2023.
Angry Social Bodies
Insufficient to absorb the shock, but enough to attract the wrath of social housing organizations, which are going into debt to finance their operations via the livret A. On July 18, the Social Union for Habitat warned in a press release that“A year ago, the Livret A rate was 0.5%. This quadrupling of the rate increases the sector’s debt burden by more than 2.1 billion euros in a full year, or 10% of the total amount of rents..
François Villeroy de Galhau considers that this level is ” balance “. “The fact that the rate no longer follows inflation exactly is more favorable” to these organizations.
To better protect savers, the Banque de France is emphasizing the LEP, or popular savings account. Its rate has now reached 4.6%: a good investment for the most modest French people, since it can only be opened subject to income conditions (for a household with one person, nearly €20,000 in annual income in the maximum).
Double the number of LEPs
Compared to the livret A, its adoption rate is low, which, according to the Governor of the Banque de France, poses a problem “Social justice” : only 40% of eligible French people have adopted it (7.3 million out of 19 million), far from the 80% rate of possession of the Livret A. Bercy has made every effort in recent months to communicate around the device, in particular by sending an email to all eligible citizens at the beginning of the year.