Speaking at a financial conference in London, the chief executive of the DMO said that the organisation would not issue bonds linked to consumer price inflation (CPI) this year, but that it might choose to in future. The DMO issues debt for the UK government.
Earlier this year, the Treasury announced that it would continue to use the retail price index (RPI) for returns on index-linked gilts. But in March, the UK statistics authority re-assessed retail price inflation, finding that the “formulation of the RPI fails to meet international standards,” and dropping it as a measure.
In 2011, the DMO said CPI-linked bonds would not be cost effective.