The start of 2025 heralds bad news for the Livret A and the LEP

© Shutterstock

French savers will soon have to face a significant decrease in the returns on their regulated savings accounts. The Livret A rate, currently stuck at 3%, could lose up to one percentage point during its next review in February 2025. This outlook, far from being a surprise to financial experts, is a direct result of the latest economic indicators and European monetary decisions.

Freefalling inflation that changes the game

The French economic situation is experiencing a major turning point with inflation plummeting faster than expected. The figures speak for themselves: While inflation excluding tobacco was still at 4.20% in July 2023, it fell below the 2% mark in August 2024. INSEE has just hammered the point home by forecasting a rate below 1% for October 2024. This spectacular deceleration completely overturns the initial projections, which were counting on inflation of around 1.7% for the second half of the year. The latest estimates now point to a rate of 1.3%.

This steep drop in inflation is not without consequences for savers. The calculation of the Livret A rate is partly based on half-yearly inflation excluding tobacco. The freeze decided by Bercy in 2023, which artificially maintained the rate at 3%, will no longer be able to serve as a shield against this new economic reality. Experts now agree on an inevitable drop in the yield of this favorite investment of the French.

200% Deposit Bonus up to €3,000 180% First Deposit Bonus up to $20,000

Interbank rates follow the downward movement

The €ster, this rate which reflects monetary exchanges between European banks, is also part of a downward trend. The European Central Bank has already made two successive rate cuts, on 12 June and 18 September 2024 respectively. A third rate cut is looming for the Governing Council meeting scheduled for 17 October.

Philippe Crevel, a renowned macroeconomist, anticipates in his economic letter a half-yearly average of the €ster close to 3.50% by the end of 2024, compared with 3.75% currently. This decline, combined with the slowdown in inflation, leaves little room for doubt as to the future direction of regulated savings rates.

Unpleasant outlook for savers

Technical calculations, based on the official formula, paint a rather unencouraging picture. For the Livret A, by integrating inflation at 1.30% and a €ster at 3.50%, the technical rate would come out at 2.40%. The Ministry of the Economy nevertheless has room for maneuver. It could opt for a soft landing at 2.50% or, on the contrary, accentuate the decline to 2%.

The Livret d’épargne populaire (LEP) will not escape this downward trend either. Its technical rate would be around 2.90%, far from the current 4%. Here again, Bercy retains decision-making latitude: maintain this technical rate, cushion the fall to 3%, or increase it to 2.50%.

• A significant drop in Livret A and LEP rates is looming for February 2025
• The Livret A rate could drop from 3% to 2.40%, or even 2% depending on Bercy's decisions
• The LEP should see its yield drop from 4% to around 2.90%

📍 To not miss any Presse-citron news, follow us on Google News and WhatsApp.

[ ]