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Livret A and LDD rates rise

There is good news for savers this month, but bad news for many people with internet or mobile phone packages

THERE is good and bad news on the cost of living from today: interest rates of two popular savings accounts are up, but many internet packages will now cost more.

The rate for the Livret A and LDD accounts, the main French options for tax-free saving, have risen from 1.75 per cent to two per cent. This is meant to help maintain people’s purchasing power, considering a recent acceleration of increases in prices in consumer goods (up 1.8 per cent in a year, partly as a result of the rising petrol price).

However the VAT rate on most telecoms packages including television has also gone up. Previously, operators offering triple- (TV, internet, landline) or quadruple-play (plus mobile) packages were able to charge a reduced VAT rate on the TV element. Now that has been put up from 5.5 per cent to the full rate of 19.6 per cent. This is being passed on to customers to varying degrees by the different operators and some are reportedly even taking advantage of it to put up charges more than the rate change requires.

Many mobile phone packages that allow you to watch TV on the phone are also affected.

If you are concerned by a tariff change, you should have been contacted by your operator and have the option to cancel within four months.

sxc Steve Woods

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