NS&I 5 year index linked saving certs 2011 issue - half way point!

polymaff

talexuser wrote: »

Are we to assume that offering RPI+0.05% indicates the government expects inflation to take off in future years after the QE experiment?

The low coupon (and the withdrawal of the product from the marketplace) reflects NS&I's reduced borrowing targets*. Inflation-linked bonds have tended to be subsidised products - and with the politically-designed 65+ bonds soaking up such subsidy as is acceptable to HMG (the grey vote factor) - Inflation-linked Certs can't have been NS&I's favoured product for quite a while.

I doubt that there is any forward planning of the sort you suggest.

*Further evidence: NS&I have just announced the slashing of their Direct Isa rate by one sixth. (1.5% to 1.25%)

DRS1

Has anyone else had a survey asking if they would be interested in certificates linked to CPI?

gadgetmind

DRS1 wrote: »

Has anyone else had a survey asking if they would be interested in certificates linked to CPI?

How about some linked to HPI?

polymaff

DRS1 wrote: »

Has anyone else had a survey asking if they would be interested in certificates linked to CPI?

But which CPI? The current CPI is being re-based (always a cover for some sleight-of-hand) and modified soon, so which CPI indeed.

I note that the three indicies being compared in this month's ONS CPI data release are the CPIH, the CPI and the OOH - the last-named having a very different profile over the last ten years.

Lies, damned lies and statistics!

lisyloo

Are we to assume that offering RPI+0.05% indicates the government expects inflation to take off in future years after the QE experiment?

I don't think that would be a safe assumption.
I think it's safe to assume they made them less attractive as they wanted to issue fewer.

talexuser

lisyloo wrote: »

I think it's safe to assume they made them less attractive as they wanted to issue fewer.

Probably saved up enough instead for the pensioner bonds to win the election
We shall see how inflation pans out though.

veryintrigued

no change on updated calc with the latest inflation figures

polymaff

veryintrigued wrote: »

no change on updated calc with the latest inflation figures

There having been quite a significant fall in the 12-monthly RPI, a £15k bond on the OP's timescale, using NS&I's projection assumptions, has dropped from a final redemption of £17,185.13 to £17,132.35

gadgetmind

I'm happy to keep on holding our bonds until maturity (May '16) but we now have a tiny interest only offset mortgage, and the interest rate on this will rise with base rates (which are loosely related to inflation) so would (effectively!) get a 2.29% return now by moving the money. I'll decide come May.

enthusiasticsaver

I am still holding £5k in this issue which matures next May. I will be cashing it in then and have just cashed in a further £5k which was in a 3 year issue rolled over in 2013. I put it towards a car instead!