2023-07-13 08:50:24
COLCANOPA
Booklet A, “Apparently, it is a perfect mechanism, but in detail, it is more complicated”, sums up the boss of a French bank. By confirming, Thursday, July 13, inflation of 4.5% over one year in France in June, after 5.1% in May, INSEE paved the way for a new increase in the remuneration of “the instrument of ‘preferred savings of the French’… and validated this observation once again.
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Because if it is practically certain that the rate of the Livret A and the Livret de développement durable et solidaire (LDDS), fixed at 3% since February, will rise from August 1, two other elements seem just as certain: this yield will remain lower than inflation and, above all, its rise will be far from unanimous among the economic players concerned, whether they are savers, bankers, insurers or social housing players.
Since the end of June, the calculators had already turned, without waiting for the final figure for the price increase: by strictly applying the calculation formula in force since January 2021, which combines the inflation figures excluding tobacco for the last six months and those of the short-term interest rate in the euro zone, known as the euro short-term rate (€STR), the Livret A could yield 4%, or even 4.1%, of annual interest from August 1, its highest level since 2008 and eight times its level at the start of 2022.
“Exceptional Circumstances”
But this strict application is unlikely because the Governor of the Banque de France, François Villeroy de Galhau, who must submit a recommendation to the Minister of the Economy, Bruno Le Maire, can argue that “exceptional circumstances” to derogate from the rule, which he had already done in February by advocating a rate of 3% when the formula allowed to go up to 3.3%.
He has carefully prepared the ground for this option in recent days, recalling that “Inflation has started to decline quite significantly”, after explaining that he wanted to take into account both “the remuneration of savers and the proper financing of housing”.
The remuneration of savers is obviously the most immediate issue, especially since the some 56 million Livret A savings accounts recorded in France have seen their collection increase by 24.5 billion euros over the first five months of the year for reach 399.9 billion, to which are added 142.2 billion euros for the LDDS.
But the August increase will only represent at best, for a passbook with an outstanding amount of 5,800 euros (the average recorded in 2021 by the Banque de France), only around thirty additional euros over the next six months, until to the next adjustment. Not enough to compensate for the loss of purchasing power linked to inflation, even if the latter is expected to slow down: in its latest forecasts, the central bank sees it returning to 2.4% on average in 2024.
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