According to the latest INSEE figures published on Wednesday, inflation continues to rise in France. In June, it reached 5.8% over one year. An increase which will automatically lead to a new revaluation of the Smic on August 1, by 2.01%.
The rise in prices (excluding tobacco) between March and June for the poorest 20% of households indeed reached 2.01%, this indicator serving as the basis for triggering automatic revaluations of the minimum wage, said INSEE.
This is the fourth increase in the Smic in less than a year, the last having taken place on May 1, with an increase of 2.65%. For a full-time worker, the monthly minimum wage should thus increase by around 26 euros net to reach around 1,328 euros..
Energy and food prices on the rise
In addition to the annual revaluation of January 1, the Smic is indeed mechanically increased during the year by the amount of inflation for the 20% of households with the lowest incomes, if this exceeds 2% compared at the last increase. In June, the rise in prices was driven by the further acceleration in energy prices (+33.1% year on year after +27.8% in May), food (+5.8% after +4.3%) and to a lesser extent service prices (+3.3% after +3.2%), details INSEE.
Conversely, the prices of manufactured products slowed (+2.5% after +3%). Core inflation (excluding energy and food) remained stable over one year at +3.7%, while the harmonized consumer price index (HICP), which serves as a basis for comparison at European level , was up 6.5% year on year, after +5.8% in May.
“Possible” doubling of the Livret A rate
Guest of franceinfoFrançois Villeroy de Galhau, Governor of the Banque de France, estimated that a doubling of the Livret A rate, from 1% to 2% from August 1, was “possible“ while excluding an exceptional gesture.
“As the application of the formula (which notably takes into account inflation, editor’s note) leads to a significant increase on the Livret A, and even more on the LEP (Livret d’épargne populaire), there is no, in our view, justification for making an additional exceptional gesture“, he explained.