The U.K. government will continue to issue bonds linked to the Retail Price Index after the Office for National Statistics said today it would leave unchanged the way it calculates the inflation gauge.
“Following public consultation, the National Statistician has today announced that no change will be made to the formula used in the construction of the Retail Prices Index,” Treasury minister Sajid Javid said said in an e-mail released by his office in London.“The U.K. Statistics Authority has endorsed this recommendation.”
“For gilt investors their future cash flows on existing index-linked gilts will continue to be calculated by reference to the RPI in accordance with the terms and conditions of those gilts,” Javid said. “The government will continue to issue new index-linked gilts linked to the RPI. The government will consider any implications of the National Statistician’s announcement on its approach to RPI indexation across different policy areas in due course.”
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