The pound is flat in forex trading today (January 10th) after it was declared the way the Retail Prices Index (RPI) is calculated will remain the same.
This morning, the Office for National Statistics (ONS) said the current measure should continue to be used for long-term indexation and index-linked gilts and bonds without being changed in any significant way.
However, the ONS research programme recently found that the RPI formula in its current form causes a gap between estimates produced by the RPI and the Consumer Prices Index and a new measure needs to be used from March 2013 with a different formulation known as the RPIJ.
Any decision to alter the current RPI so that it rises more slowly would have reduced the future pension increases of millions of private sector pensions.
At 10:00 GMT, the pound rose by 0.1 per cent against the dollar to £1 buying $1.604, while it made marginal losses versus the euro to €1.225.
Learn about the markets and forex trading at City Index.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.