Remember: at the start of 2022, the Livret A only brought in a meager 0.5%, prices were almost stable, a liter of gasoline was worth 1.71 euros and banks offered property loans at 1%. Less than two years later, the context has radically transformed for individuals, both in terms of their consumption, their savings and their loans. The European Central Bank (ECB) has in fact raised its key rates by 425 basis points since July 2022, up to 4% since September 14. The objective? Tame inflation to bring it back to 2%.
However, the decisions of the institution chaired by Christine Lagarde have concrete consequences for individuals. On the other hand, real estate loan rates soared, reaching 3.92% on average over twenty years in August, according to the Crédit Logement/CSA Observatory. On the other hand, the return on risk-free investments is recovering. “For years, we had no solution for our clients who had money to invest in the short term. We can finally offer them risk-free investments with an acceptable return”, underlines Françoise Neige, director of wealth management at Natixis Wealth Management.
Regulated savings accounts, bank accounts, term accounts and money market funds have regained their place in the arsenal of secure investments with returns around 3%, compared to almost zero two years ago. Savers have taken note of this spectacular recovery by emptying their current accounts in favor of risk-free investmentsLivret A in the lead, whose collection reached 28 billion euros over the first seven months of the year. “Individuals can look forward to returning to their Livret A and other risk-free investments. But let’s be clear: real remuneration, that is to say taking inflation into account, remains negative today., recalls Frédéric Largeron, the director of the wealth bank of the SG network in France.
Rising prices (4.8% over one year in July 2023, according to the National Institute of Statistics and Economic Studies) is in fact higher than the 3% of Livret A. “It is therefore necessary, if possible, to devote a maximum of two to six months of salary to short-term precautionary savings, to cope with unforeseen expenses, and to position yourself on longer-term savings for the surplus”continues Frédéric Largeron.
“Visibility on short-term savings”
The situation should gradually improve in the coming months thanks to the decline in inflation, while the yield on the Livret A is frozen at 3% until the beginning of 2025. “The European Central Bank expects inflation to be 3% in 2024 then 2.2% in 2025, notes Philippe Crevel, director of the Savings Circle. This means that the real return on risk-free investments will gradually become positive again at the end of next year. »
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