Does the livret A interest rate need a little boost?

• For the first time in eleven months, the French took more money out of their livret A than they saved.

• The government plans to finally raise the rate of this savings account, unchanged since February 2020.

• Between galloping inflation, return to normal and the fifth wave, the livret A rate is above all a question of complex balance.

Is libretto A sinking? In October 2021, the French withdrew more money than they deposited in this savings account, a first since October 2020. This difference of minus 2.83 billion euros between what was saved and what that was spent is also the biggest outflow in seven years. Coincidence? The government plans to redress the interest rate in early 2022. A panic linked to savings that would have lost any benefit in the eyes of the French, with its starving 0.5%, unchanged since February 2020?

Rest assured, the booklet A is going well, thank you for it!

Since the start of the health crisis in March 2020, the French have deposited more than 40 billion euros there, proof of their attachment to this account.

If October recorded a negative balance, the first ten months of the year 2021 saw savings increase by 16.96 billion euros, or 3.5 billion more than the first ten months of 2019, the year before. crisis.

The recent outflow would therefore be more a return to normal than a collapse of the credibility of the livret A.

October, cursed month for savings

These expenses were facilitated by two factors. First, October is a month that comes back often when it comes to emptying your accounts. "It's the cursed month," confirms

Philippe Crevel, director of the Cercle de l'Épargne, a center for studies and information on savings and retirement. The reasons are multiple: last purchases for school supplies and first preparations for Christmas, local taxes, purchases for housing in view of winter and absence of premium, traditionally reserved for June and December. Because of this strongly negative balance between loss and inflow of money, it is common for the French to dip into their savings.

To this is added a second reason, specific to 2021: inflation.

With an inflation rate of 2.6% in October, prices increase faster than wages, but also much faster than the remuneration of the livret A and its interest rate at 0.5%.

"It is much more profitable to get the money out and spend it now on purchases that will cost more as we wait", analysis for

Stéphanie Villers, economist specializing in macroeconomics.

For her, far from being a movement of panic, the October outflow shows on the contrary that the French, neither fundamentally cicada or ant, “have common sense in their management of money and are pragmatic”.

Fifth wave, new savings?

Last reason - and proof that things are moving fast - October was the month of good news.

A low number of coronavirus cases, falling unemployment, strong job creation.

"The period was tranquilizing and encouraged the French to consume", supports Philippe Crevel.

But now November has chased October and its share of positivity.

A fifth wave of covid is sweeping across Europe, while a very disturbing new South African variant has emerged.

Faced with this bad news, the world stock markets are sinking and the French could once again be tempted by the reassuring side of savings, especially if the government raises the interest rate of the livret A - a rate revised to 0.7 or 0.8% would be considered by February 2022.

Simple calculation, complex equilibrium

According to the classical calculation of the interest rate, with an inflation of 2% over the year, according to the forecasts, and an interbank rate of around -0.5%, the interest rate should be 0.75% . "But it is a purely informal calculation, the government decides - or not - to follow it", notes Philippe Crevel. The executive can as much decide not to move the interest rate of the livret A as to fix it at 1% for example. The problem could be to make the livret A too tempting in times of crisis and uncertainty and therefore boost savings, thus hampering the consumption of the French essential for growth.

“The government is caught in a pincer movement between headwinds,” metaphor Stéphanie Villers. On the one hand, galloping inflation in France, which pushes the executive to give a hand to French households, on the other hand the covid crisis which resumes, forcing to be wary of over-savings harmful to the economy. Still in the picture, Stéphanie Villers continues: “You need the right dosage to restart the machine without making it run away. "

Clever - or calculator in view of the 2022 presidential election - the government has given itself a margin since it should not touch the interest rate until the beginning of next year, giving it time to analyze the end of year trends.

The whole question will be to see which of the fifth wave or inflation will have calmed down by then.

For the first, Stéphanie Villers is already seeing signs of a lull in price increases and believes that this rise could only be transitory.

Nothing therefore says that the rate of the livret A will move.

This is the whole difficulty of saving in economics: having to be profitable, but not too much either.

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