January 10, 2013 / 7:50 AM / 6 years ago

UK to continue to use RPI for new index-linked gilts

A generic picture of a some British sterling money in coins and bank notes. BANKG REUTERS/Catherine Benson

LONDON (Reuters) - The Treasury said on Thursday that it would continue to use the Retail Price Index (RPI) to calculate returns for new index-linked government bonds.

Earlier, the country’s statistics office unexpectedly decided against changing the metrics used to calculate the index.

Rather than change the RPI, the Office for National Statistics decided instead to create a new RPIJ index that incorporates the expected statistical revisions.

“For gilt investors, future cash flows on existing index-linked gilts will continue to be calculated by reference to RPI,” economic secretary Sajid Javid said in a statement.

“The government will continue to issue new index-linked gilts linked to the RPI.”

Reporting by David Milliken; Editing by John Stonestreet

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