29 June 2011
The United Kingdom Debt Management Office has launched a consultation aimed at exploring the viability of launching a CPI linked gilts issuance program. Prior to committing to this, the DMO wish to establish the level of investor appetite and commitment to this product, both in absolute terms and relative to the well established RPI-linked gilt program.
The consultation closes on 22 September 2011.
The consultation paper is obviously relevant in the context of recent discussions on CPI vs RPI indexation. It is very accessible but investors may also prefer to consult with advisers or with their bond / LDI manager to help form their view. A CPI product could help many schemes more accurate match some liabilities but any new market would take significant time to broaden and deepen sufficiently to mirror the RPI market.