Livret A Interest Rate Reduced to 1.5% Amid Slowing Inflation in France

The Banque de France has proposed a reduction of the Livret A interest rate to 1.5%, effective February 1, 2026, down from the current 1.7%. This marks the lowest level for the regulated savings rate since 2022. The decision, supported by France's Minister of Economy and Finance Roland Lescure, follows the publication of December 2025 inflation data by Insee, which revealed a significant slowdown in annual inflation to 0.8% (0.7% excluding tobacco).

The reduction was initially anticipated to be to 1.4%, but the Banque de France opted for a slightly higher adjustment to better protect the purchasing power of savings. Lescure emphasized that despite the "slight" decrease, the Livret A rate remains “significantly above” inflation. This decision aims to support popular savings while benefiting social housing financing and banks by lowering the cost of regulated savings.

The calculation formula for the Livret A ties the rate to inflation and European Central Bank policy, resulting in this downward trend amid easing price pressures such as a 6.8% drop in energy prices year-on-year in December. The rate has been cut in half over the past year from 3% in February 2025.

Additionally, the Livret d’épargne populaire (LEP), targeted at low-income savers, is proposed to be set at 2.5%, well above the Livret A rate. Minister Lescure highlighted that the LEP remains underutilized, with only 12 million accounts despite 31 million eligible French citizens.

The Livret A is held by approximately 57 million French citizens, making this rate adjustment a significant development for personal savings and the broader economy.