2023-05-27 20:03:47
In just over two months, the rates of regulated savings accounts (Livret A, LDDS, LEP, CEL) might increase once more on August 1, one of the two annual review deadlines. The Governor of the Banque de France, François Villeroy de Galhau, will decide in mid-July, as is the rule. He has two options: let the rates update automatically according to the evolution of inflation and short interbank rates or invoke “exceptional circumstances” to derogate from this rule.
Depending on his decision, savers will have very different outcomes. If he chooses the first option, the Livret A rate, currently set at 3%, will increase to well over 4%. According to Eric Dor, director of economic studies at the IESEG School of Management, the rate might reach 4.30%. He explains that inflation excluding tobacco was 6.11% in January, 6.39% in February, 5.67% in March, and 5.83% in April, and that a plausible projection would be estimate at 5.8% in May and 5.5% in June. The half-year average for inflation excluding tobacco would thus be 5.88%.
The half-yearly average of the €STR rate from January to June would stand at 2.66%. With these projections for the half-yearly averages of the €STR rate and inflation excluding tobacco, strict application of the formula would imply a Livret A rate of 4.3%.
LDDS and Livret A might see their rate increase
It is unlikely that savers will benefit from a rate of 3% on the Livret A, but calls to maintain this rate come from the banking sector, the Caisse des Dépôts and even the minister delegate in charge of towns and housing. The derogation should be applied.
However, the rates of Livret A, LDDS and CEL will probably increase, but to a lesser extent. The Minister of Economy opened the door to an increase in early May.
This situation would improve the real yield of the Livret A, corrected for inflation, which is currently negative. The differential between the Livret A rate and inflation is currently more than 3 points.
LEP: rate down
Bad news for the most modest households: the rate of the People’s Savings Book (LEP) will drop. This product is designed to follow the average inflation of the previous semester. On February 1, its rate rose from 4.60% to 6.10% to align with inflation in the second half of 2022. However, the price increase should be less significant in the first half of 2023, by around 5.90%. The LEP rate should therefore come in line with this mark and fall slightly by 20 basis points.
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