News Headline Summary

UK will continue to publish RPI, formula will not change, according to ONS

- ONS decision means no impact on holders of RPI linked Gilts.
- UK RPI doesn't meet international standards, according to ONS.
- UK should publish a new inflation index, to be known as RPIJ.
- RPIJ will begin to be published from March 2013.
- The BoE to make public its views on RPI calculation on 15th Jan.

Analysis details (08:05)

- It was widely expected that the ONS will bring RPI into line with CPI, tightening the spread between the calculations, which could cut RPI by up to 1%. This would have major implications for pension funds that hold index linked gilts slashing interest payments to them by reducing the break even rates on respective index-linked gilts. However, today the ONS said that the decision means no impact on holders of RPI linked Gilts.

10 Jan 2013 - 08:00 - Fixed Income Economic Commentary - Source: Newswires

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