U.K. Pension Indexing May Hasten CPI-Linked Bonds, Barclays Says

The U.K. government’s plan to align future increases in pensions to the consumer-price index measure of inflation rather than the retail-price index may lead to offerings of CPI-linked bonds, Barclays Plc said.

“This clearly hastens the likely introduction of CPI-linked bonds in the U.K.,” Moyeen Islam, a fixed-income strategist in London, wrote today in an investor note. “For the moment there is little alternative to hedge what are now CPI exposures” than with RPI-linked products, he wrote.