Reuters/Reuters - A generic picture of a some British sterling money in coins and bank notes. BANKG REUTERS/Catherine Benson[/caption]LONDON (Reuters) - Britain's top statistician unexpectedly decided against major changes to the country's longest-running inflation index on Thursday, rejecting a move that could have significantly cut government borrowing costs.
The decision to keep the Retail Price Index in its current form is a major boost for older Britons who have company pensions linked to RPI, as well as to holders of Britain's inflation-linked government bonds.
Changes to RPI had been expected to bring it closer to the lower Consumer Price Index measure of inflation (CPI) used by the Bank of England, and prices for 10-year index-linked gilts soared on Thursday's news, taking yields to a record low.
RPI was developed after World War Two, but in recent years it has increasingly diverged from CPI and for months Britain's Office for National Statistics had been consulting economists, fund managers and other users of the data on its proposals...Read the entire story
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