Livret A: a further rate increase expected in February 2023

After increasing twice in 2022 due to inflation, from 0.5% to 1% in February, then to 2% from August 1, the Livret A rate is set to rise again in February 2023, as indicated by recent statements from François Villeroy de Galhau, Governor of the Banque de France.

Livret A rate likely to rise for the third time in a year

"In all probability [...] the upward trend in the Livret A rate will continue on February 1 next year," declared Banque de France Governor François Villeroy de Galhau on Tuesday July 19.

The trend in inflation and interbank rates, the two factors used to calculate the Livret A interest rate, suggest that the rate will rise again when it is next reviewed in February 2023.

From 0.5% at the start of the year, the Livret A rate was first raised to 1% in February. Recent recommendations from the Banque de France led the government to approve a second increase to 2%, effective August 1.

Real yield still negative

The Livret A rate is revised every six months, based on two components:

  • the average half-yearly inflation rate
  • the half-yearly average of interbank rates

Inflation is set to continue rising over the coming months: price rises averaged 4.55% between January and June, and should reach between 6.5 and 7% from September to the end of the year.

Meanwhile, the European Central Bank has decided to raise its key interest rates to combat inflation. They will rise by 0.25 points on Thursday July 21, with a second increase of 0.5 points expected in September. This two-stage increase will lead to a rise in interbank rates.

Rising inflation and higher interbank rates should therefore lead to a further increase in the Livret A rate next February.

While the rate on France's favorite savings account is rising, its real yield remains negative due to the level of inflation.