It is now almost certain. The Livret A rate is expected to decline in February. No account for inflation in December, the rate should theoretically drop to 0.25%. Certainly, the Bank of France suggested the government to make a gesture in limiting the decline to 0.75%. In any case, whatever the decision Bercy, Booklet should no longer be used 1% from next month.
A real rate yet comfortable
Investors in feront- they really costs? In the non-immediate. According to the latest monthly report from INSEE, inflation should remain near zero on the first part of the year. That is, even falling to 0.75%, the Livret A could offer a real return (net of inflation) of 0.75% during the first months of 2015.
On an annualized basis, Booklet and would do better than in 2014 (0.64%), and over the last 10 years (0.7% per year).
A critical point in mid-year
The situation could however be more embarrassing from the summer. The possible revision of the rate for the month of August will be in terms of inflation to end of June. Now, according to Insee, inflation should remain zero in June.
The Livret A rate should therefore not a priori back in August 2015. This may be especially most disadvantageous for investors that inflation could return late in the year. This is what suggest to government projections, Brussels or the OECD, which show an average annual inflation of 0.5% to 0.9% in France in 2015.
Assuming that these predictions are confirmed, a booklet A to 0.75% for the full year could therefore provide a real return zero or even negative in 2015, as has already happened in 2010 and 2011 ( -0.02% and -0.04% real yield).
These expectations should in any case strengthen those who have already chosen to withdraw their money from their Livret A to move towards media sometimes more demanding but also more profitable, as ELP.
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