Inflation-linked bonds Ready for take-off, or a load of hot air?

The sale of the first euro-denominated corporate inflation-linked bond in June has helped cement the inflation-linked market's claim to being 'the next big thing' in the bond market. But will it prove to mark the birth of a new asset class in Europe – or end up as a mere footnote in credit's history? Laurence Neville reports

Even by the standards of financial markets, the inflation-linked market has been inordinately hyped during its relatively brief life. Bankers constantly reiterate the vast potential for issuance and investment. Every new issue is heralded as a breakthrough and every new mandate for investment is seen as proof that inflation-linked products are growing inexorably.

Yet – and though Credit is loath to admit when investment bankers' claims prove to be substantiated – it appears that there