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Shift to CPI will not impact pension fund inflation hedging demand – M&G
Limited impact of CPI change on pension funds inflation hedging
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The recent move by the UK's government to shift the inflation metric used to index UK private pension liabilities from the Retail Price Index (RPI) to Consumer Price Index (CPI) will not impact the scheme's demand for inflation protection, according to Miles Tym, institutional fund manager at M&G Investments.
The CPI is used as the standard measure of inflation in the European Union, and in most advanced economies, but the UK's private pension sector uses the Retail Price Index, which includes
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