Weekly Update - High Savings: Could Interest Rates Explain It More Than Uncertainty?

The French households are saving more than before the health crisis—and this trend is growing stronger. This behavior contrasts with purchasing power trends and developments seen elsewhere in the eurozone. While economic and political uncertainty is often cited, high interest rates also play a key role in this sustained saving.

An atypical post-Covid path… Uniquely French. Since 2020, the French household savings rate has experienced unprecedented fluctuations. After a phase of forced saving linked to Covid, consumption partially rebounded, but the savings rate remained sustainably higher. In 2025, this trend strengthens: in the first quarter, the savings rate reached 18.6% of gross disposable income, compared to about 14% before the pandemic.
Whereas Italy and Spain saw a normalization of their post-Covid savings rates—reflecting purchasing power constraints pushing households to dip into their reserves—France and Germany stand out with persistently high savings levels. However, this similarity ends in 2024, with the German savings rate declining while the French household rate rises again. This recent divergence highlights a dynamic specific to France

The classic explanation: economic and political uncertainties. The economic situation of French households appears relatively more favorable than elsewhere in the euro area, with inflation remaining lower and purchasing power gains significantly higher. Yet confidence surveys show the French are more pessimistic. The INSEE notes in its September Economic Brief this “gap between individual perceptions and actually measured aggregates.” Uncertainty—whether political, economic, or geopolitical—is a plausible explanation: households worry about the future and delay spending. But this view should not overshadow another powerful driver of saving: high interest rates.

The Underestimated Explanation: High Rates Driving Savings Up. Interest rates remain high in France and contribute to elevated savings through several channels:

- Nature of income: A significant share of purchasing power gains comes from asset income, boosted by rates. This income is often automatically reinvested, especially by wealthier households with a strong saving propensity.

- Credit drying up: Rising rates have slowed credit access, pushing households to keep a higher precautionary savings buffer due to lack of external financing.

- Trade-offs: More attractive returns encourage shifting toward saving rather than consumption.

In conclusion, the high savings of the French are not only a reaction to uncertainty but also a rational behavior. The context of sustainably high long-term French interest rates would maintain this trend, continuing to weigh on consumption and thus growth prospects.

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