Gas prices up but savings earn more

GAS is set for a price hike, but savings are set for a boost also.

The price of gas is to go up 4.4% on January 1, says Energy Minister Eric Besson, putting an end to uncertainty since the Conseil d’Etat ruled that a planned price freeze was against rules pegging prices to increased costs to GDF.

Prime Minister François Fillon promised a week ago that the increase would not be more than 5%, despite the fact a strict application of the rules would have resulted in 8.8-9%. The government is understood to have tweaked them to keep the rise under control.

Meanwhile, due to the fact that it is pegged to price rises, the interest rate of France’s most popular savings account, the Livret A, is predicted to increase from a current 2.25% rate to 2.5% or even 2.75% on February 1.

This would also apply to the Crédit Mutuel’s Livret Bleu, which is identical, or to the similar LDD account (to be renamed LDID next year).

A rate of 2.75% would make assurance vie (life assurance), a less flexible savings method with similar rates, increasingly unattractive, experts say.