–Livret A Savings Rate To Rise To 2.0% In February
PARIS (MNI) – French Finance Minister Christine Lagarde said
Thursday she was not alarmed about accelerating inflation and the effect
on real incomes, since core inflation remains tame.
The 0.5% rise in French consumer prices in December, reported
earlier Thursday, lifted annual rates for both the EU-harmonized HICP
and national CPI by 0.2 point to +2.0% and +1.8%, respectively, the
fastest pace in over two years.
“I’m not very worried,” Lagarde said in a radio interview.
“Evidently we must pay attention. But given that core inflation is at
[an annual rate of] 0.7%, I think we can be fairly relaxed.”
Nevertheless, the minister highlighted the mounting pressure on
imported energy and food prices as a result of growing demand in
emerging economies. She reminded that the mechanisms for setting
commodity prices would be a focus for international debate during
France’s presidency of the G20 this year.
Lagarde also played down the impact of rising prices on households’
purchasing power, arguing that the recovery in employment was more
important.
One positive spinoff of the pick-up in inflation will be a hike in
the yield on popular subsidized savings deposits, the Livret A, from
1.75% to 2.0% starting in February, she said. Bank of France Governor
Christian Noyer, in a statement released shortly afterwards, also
recommended that the hike be implemented.
In a effort to bolster the morale of the French — the world’s
champions in terms of economic gloom, according to a recent survey —
Lagarde stressed that the country’s entrepreneurs are talented and
capable of innovation and that certain industry sectors are among the
world’s leaders. She cited as an example the recent order from India for
150 Airbus planes.
–Paris newsroom +331 4271 5540; e-mail: stephen@marketnews.com
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