Will the expected maintenance of high inflation in the first half of 2022 lead to a further rise in the Livret A rate in August? Nothing is less sure. LEP, on the other hand, stands every chance of benefiting from a further boost.
The good news was widely shared and welcomed. On 1 February next, the rate of the Livret A, and in its wake those of all the regulated savings accounts, will increase, a first for almost 10 years. The origin of this increase has also been extensively commented on: it is reduce the gap between the Livret A remuneration and inflation, which has been rising sharply for 6 months. The consumer price index (CPI) is, in fact, one of the variables considered in the formula for calculating the rate of regulated savings accounts.
This revaluation, announced for several weeks, has however reserved a little surprise. The government chose to go beyond the strict application of this formula, which showed a rate of 0.80%, and fixed the new remuneration of the Livret A 1%.
Livret A, LDDS, LEP, Livret jeune… Official rates as of February 1, 2022
In a press release published last Friday, the Banque de France, in charge of calculating the new rate, justified this exception to the rule, a possibility provided for by the texts: According to the projections of the Banque de France, the application of the same formula would lead a rate at least equal to 1% on August 1, the date of the next review. The Governor of the Banque de France considers that this prospect justifies a drug limit strict application of the calculation formula and proposes that the rate for the livret A be set from 1 February 2022 at 1.0%.
Clearly, the Banque de France has chosen toapply from 1 February the minimum rate anticipated for 1 August. This is what is called a helping hand.
Status quo until 2023 for Livret A
How to explain this generosity? It’s hard not to give it to her a political sense. This choice allows, in fact, the executive to benefit immediately from the positive fallout from an increase in the Livret A, rather than in six months, either after the presidential election.
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However, it has another consequence: it closes any prospect of a second consecutive increase of the Livret A rate in August. This, even if such an increase was justified by a new surge in consumer prices. A scenario confirmed, in hollow, by the communication of the Banque de France: [nos prvisions] predict (…) a fall in inflation below 2% by the end of 2022: the calculation of the rate of the livret A will change accordingly in 2023. See you, therefore, in a year.
LEP beyond 2.5% in August?
This does not mean, however, a general status quo on regulated savings. Another booklet can now evolve independently of the Livret A, unlike the LDDS: the People’s Savings Account (LEP). This is moreover a novelty, following the reform of the 2018 rate-setting method and intended to fulfill a commitment from the public authorities: the mission of the LEP is to protect the purchasing power of savers with the lowest incomes by neutralizing the effect of the rise in prices on their savings.
Thus, according to the texts, the LEP rate cannot be set at a level lower than that of inflation for the previous semester. i.e. 2.2% currently, and probably much more next August. Month-on-month inflation reached 2.8% at the end of 2021 and should not fall below 2.5% by the summer. Contacted, the Banque de France has confirmed to us that the scenario of a status quo for Livret A and an increase in the LEP rate was consistent with the texts, and therefore imaginable in 6 months.
LEP: are you entitled to this great booklet without knowing it?