Spotlight on index-linked gilts and UK inflation


Proposed changes to measuring UK retail price inflation have had significant influence on the prices of long-dated index-linked gilts.

  • 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.

Read more

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.

For institutional investors only. Not for onward distribution to any other type of client. No other persons should rely on the information contained on this website.