- The Chancellor of the Exchequer has delayed a proposed realignment of UK RPI with a consumer price measure (CPI-H) until at least 2025.
- CPI-H has historically been about 1% lower than RPI, thereby reducing future cashflows from index-linked gilts.
- Anticipating the changes has had an immediate influence on the prices of ILGs maturing after 2025. Using non-gilts to access the UK index-linked market may be attractive.
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The value of investments will fluctuate, which will cause prices to fall as well as rise and investors may not get back the original amount they invested.