CPI

People's savings are being hit by high inflation and low interest rates, MoneyVista has revealed.

Proposals on changes to the calculation of the retail prices index (RPI) may harm pension funds, savers and investors, experts have claimed.

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 UK's main inflation rate fell back towards the 2% target in August after reversing a surprise jump the previous month.

Switching the indexation of public sector pension benefits from RPI to CPI in March 2011 saved the government £126bn, a report says.

The UK's inflation rate posted another surprise drop in May, falling to 2.8%, as the lack of activity in the UK continues to bring prices down sharply.

SOAPBOX

US

The UK Consumer Prices Index (CPI) climbed in March as higher food and clothing prices pushed inflation up to 3.5%.

Unions have lost their appeal against the judicial review that backed the government's decision to use the Consumer Prices Index for uprating public sector pensions.