French Finance Minister Bruno Le Maire announced on Friday that the interest rate on Livret A passbook savings accounts would be raised to 3% on February 1, from the current 2%.

This revision will be accompanied by an increase in the rate on the Livret d'Epargne Populaire (LEP), reserved for the most modest categories, to 6.1% from the current 4.6%.

The government has thus followed the recommendation of the Banque de France, which had recommended a rate of 3% for the red passbook, which is very popular with the French.

The interest rate on the Livret A, whose calculation formula is based on the rate of inflation, had risen from an all-time low of 0.5% to 1% on February 1, 2022, before doubling again to 2% on August 1.

At 3%, it nevertheless remains lower than expected inflation in 2023, the government having based its budget on an inflation forecast of 4.2%. (Written by Blandine Hénault and Kate Entringer)