2023-07-03 04:33:00
Inflation in France in June 2023 is slowing down
On Friday June 30, 2023, INSEE published provisional inflation data for France. It remains high, more than twice the ECB’s target of 2% per year. In France, in June 2023, the rise in prices reached 4.5% over one year. It’s still too much, but it’s better than in May 2023 when it stood at more than 5%.
The rise in prices is slowing down, and this is good news for households. But inflation remaining high is also good news for savers. Because this data is taken into account in the mathematical calculation of the annual interest rate of the Livret A and the LDDS. In fact, the semester being over, it is possible to anticipate the future rate. Savers know it: on August 1, 2023 the rate of the two tax-exempt savings accounts will change.
What interest rate for the livret A and the LDDS in August 2023?
Since the inflation data for June 2023 is provisional, it will not be possible to know the final decision of the Banque de France and then of the government until mid-July 2023, when the final data is published by the statistical institute. . However, it is rare that between the provisional data and the final data, the variation is significant.
In fact, it is possible without too much error to calculate average inflation for the first half of 2023 in France. It reaches 5.60% according to calculations made by specialists. And another piece of information is available: the half-yearly average rate of the €ster, the European interbank rate, which is also used in the formula for calculating the interest rate. It climbed to 2.65% on June 29, 2023 for the first half of 2023.
The calculation of the rate of the Livret A and the Livret de Développement Durable et Solidaire (LDDS) is therefore feasible. And its result portends a future rate increase. Applied, the mathematical formula indeed gives the result of 4.10%. However, since February 1, 2023, the rate of the two tax-exempt booklets is 3%. It is therefore an increase that awaits French savers.
Booklet A, LDDS: increase or stagnation?
As with each forecast revision of the Livret A and LDDS rates, nothing is played. The Banque de France will give its recommendations to the government in mid-July 2023, when the final inflation data is published by INSEE. And this in order to use the most exact data, the provisional inflation and the definitive inflation being able to vary by a few tenths of a point.
Then it will be up to the government to decide what to do. The latter might follow the mathematical calculation, and therefore opt for a sharp increase in the rate of the Livret A which would, in fact, exceed 4%. He might also choose to do nothing and keep the rate at 3% until February 1, 2024.
More likely, the executive will try to find a middle way. Savers are indeed expecting a rise in the rate, while the economic situation would tend to make them prefer the absence of change. To please everyone, the upside might be minimal, potentially half a point. This might bring the Livret A to 3.5% per year.
It’s still lower than inflation in France, which means households are losing money, but it’s good news for savers.
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