Raised to 1% in February, the interest rate on the Livret A is due to be recalculated by the Banque de France on July 15. Given the rise in inflation since the beginning of the year, it could double again to reach 2%.
Inflation could accelerate by summer
Twice a year, on January 15 and July 15, the Banque de France recalculates the Livret A interest rate. The calculation formula is based on the half-yearly average of inflation excluding tobacco, and the half-yearly average of short-term interbank rates in the euro zone. A floor rate of 0.50% has been set.
According to Insee estimates, inflation will continue to rise over the coming months. From 4.8% in April, the consumer price index could reach 5.4% in June. These figures take into account the rise in production prices, which is passed on to consumer prices, and are based on the likelihood of oil prices stabilizing.
Livret A rate likely to double again
Taking INSEE projections into account, the average half-yearly inflation rate is close to 4.4%, while short-term interbank rates are at around -0.58%. As a result, new calculations by the Banque de France on July 15 could bring the interest rate on the Livret A and the Livret de développement durable et solidaire (LDDS) to 1.9%.
Once the government has received the Banque de France's proposals for a new interest rate on the Livret A and LDDS, it has the option of following these recommendations or not. It can also make adjustments, and decide to apply a rate lower or higher than that calculated by the Banque de France.
At the beginning of the year, the Banque de France's calculation formula had produced a rate of 0.8%, but the government decided to round this up to 1%. It is therefore likely that the Livret A rate will double again this summer to reach 2%.