Pensions shackle UK to RPI linkers, say traders

Carney’s call to end use of flawed inflation index faces obstacles

Retail price index 3
The retail price index was ditched as an inflation measure by the UK's statistics office, partly because of arithmetical problems

Inflation traders are sceptical the UK can ditch the flawed index that is used as the official reference for inflation-linked government debt – even over the 10-year timeframe suggested by Bank of England governor, Mark Carney, last month. 

The retail price index (RPI) was dropped as an official measure by the UK’s Office for National Statistics (ONS) in 2013 – in large part because of arithmetical problems that could inflate the index – but it remains the benchmark for the £314 billion ($434

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