LEP: the Popular Savings Book rate will be clearer from February 1, 2024

The incredible Popular Savings Account (LEP) rate will undoubtedly drop on February 1st. But by how much? This is the question that worries all frugal savers who are currently benefiting from the best investment guaranteed against inflation with a net return of 6%. There is no more tension for Livret A, as its 3% rate has been exceptionally frozen until 31 January 2025, regardless of price increases. But the Popular Savings Booklet’s return will remain well correlated with inflation during its next revaluation effective from 1 February 2024.

However, this inflation is decreasing month by month, as confirmed by the latest statistics published by INSEE this Wednesday, November 15. Consumer prices excluding tobacco rose over the year in October, but by 3.9%. “only”, compared to a further 4.8% in August and September and 4.2% in July. For the next LEP rate review, which will be announced in mid-January 2024, the average annual inflation observed over the past six months (from August to December 2023) will be used to calculate its new rate.

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Currently, the average non-tobacco inflation since July is 4.43% (3.9% + 4.8% + 4.8% + 4.2%), which would mean the LEP rate rounded up to 4.4%. A hypothesis confirmed by the forecasts of INSEE and Banque de France, which expect inflation between 4.2% and 4.5% for the last two months of the year. The LEP remuneration could thus fall by 1.6 percentage points (from 6% to 4.4%) on February 1, 2024.

New reinforcement for LEP?

So the decline promises to be significant, although, as the Bank of France and the Ministry of Economy and Finance demonstrated last July, it is possible to deviate from this mathematical rule. When the LEP yield was last revised on August 1, 2023, the average price increase over the past six months was 5.57%. Which would have resulted in a LEP rate of 5.6%. The reward, which was finally set at 6%, to “develop popular savings”, as Bank of France Governor Fran├žois Villeroy de Galhau boasted at the time. To continue on this path and further democratize the Popular Savings Account, Bercy could once again choose to moderate the decline in its yield and keep it above inflation.

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