The governor of the Banque de France indicated on Tuesday that the rise in the Livret A rate, which rose to 2% on August 1, probably has not ended and called for the mobilization by the Livret d’épargne populaire (LEP).
The Livret A rate, which started 2022 at a low of 0.5%, doubled for the first time on February 1 and will double again on August 1, maintaining a negative yield due to the level of inflation. The remuneration of this savings account, a savings product held by most French people, depends on inflation (5.8% in June) and on interbank rates, at which banks exchange money in the short term.
However, inflation is apparently not yet at its peak and the expected increase from Thursday in key rates from the European Central Bank (ECB) should push the second component of the formula higher. The governor of the Banque de France also insisted on the interest of the Popular Savings Book (LEP) whose remuneration will increase to 4.6% on August 1. It is reserved for households with little or no taxes.
Of the 18.6 million eligible French people, only 6.9 million people (37%) had one at the end of December 2021 and their outstanding balance has drastically decreased since 2008, from 65.1 billion euros to 38, 3 billion euros today. The “first priority” is to “further equip” the French who are entitled to it, said François Villeroy de Galhau, to open “additional millions of LEPs in the coming years.” For this, “the mobilization of all must continue, including the banking networks.”
Source: BFM TV