Livret A rate could drop to 1%

Interest paid on Livret A savings accounts in France could drop to 1% in July

Bank of France governor says inflation may force cut in interest rates paid on millions of savings accounts

INTEREST paid on Livret A savings accounts in France may drop a quarter of a percent in July, the governor of the Bank of France has said.

Christian Noyer told BFMTV that the current record low rate of 1.25% paid on Livret A accounts “is expected to decline slightly” next month, if inflation in France continues its current trend.

“It will be good to revive the economy and create jobs,” he said.

Inflation in France stood at 0.7% according to the National Institute of Statistics and Economic Studies (Insee).

The figures for May will be released on Thursday.

Last month, Prime Minister Manuel Valls refused to rule out a cut in interest rates for Livret A - the most popular form of savings account in France.

He said at the time: “We’ll see. I do not comment on rumours.”

Interest on Livret A is reviewed twice a year, in January and July. The Bank of France had recommended a cut to 1% at the start of the year, but the government held the rate at 1.25%.

There are around 63 million Livret A accounts in France. They are tax-free savings accounts limited to one per person, adult or child, resident or non-resident.

Photo: Unclesam www.fototlia.com

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