Some British pensioners, as well as investors in index-linked gilts, face lower returns if proposals to align the retail prices index (RPI) measure of inflation with the consumer prices index (CPI) are approved.
The Office for National Statistics' (ONS) Consumer Price Advisory Committee, which has been tasked with considering changes to the RPI, has made three proposals which would move RPI closer to CPI. The move could save the Treasury £3bn a year in debt interest payments. But experts said it could also present a problem for bondholders. RPI is used to calculate returns on British index-linked gilts and annual rises in some private pensions. Jonathan Gibbs, an investment director at Standard Life, told Reuters: "There is a trust issue. Clearly the Chancellor wants to reduce his borrowin...
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