Index-linked gilt, inflation uplift

aroominyork

I've just received my first T29 coupon payment and the DMO's site (https://www.dmo.gov.uk/data/ExportReport?reportCode=D5I) nicely shows how it is calculated. I hold 45283 units so *0.125% coupon, 50% of that (6-monthly coupon) *1.70874 (index ratio) = £48.36, the amount credited. My question is whether taking the percentage change in index ratio from last autumn's coupon shows the RPI uplift applied in this 12 month period, ie 1.70874/1.63188 = 4.71%.

SnowMan

Yes that is the lagged RPI uplift from the coupon a year ago to the coupon now. Expressed in another way based on the lagged RPI index a year ago and now

The uplift is 405.69/387.44 - 1 = 4.71%

where 405.69 = interpolated June/July RPI for 2025 (= 9/30 x 404.5 + 21/30 x 406.2)

and 387.44 = interpolated June/July RPI for 2024 (= 9/30 x 387.3 + 21/30 x 387.5)

And the indexation since issue of 1.70874 for the Sept 2025 coupon = 405.69/237.42 where 237.42 is the lagged RPI at issue which is interpolated from the August/September 2011 RPI (= 236.1 x 8/30 + 237.9 x 22/30) 

And the indexation of 1.63188 for the Sep 2024 coupon = 387.44/237.42

aroominyork

SnowMan said:

Yes that is the lagged RPI uplift from the coupon a year ago to the coupon now. Expressed in another way based on the lagged RPI index a year ago and now

The uplift is 405.69/387.44 - 1 = 4.71%

where 405.69 = interpolated June/July RPI for 2025 (= 9/30 x 404.5 + 21/30 x 406.2)

and 387.44 = interpolated June/July RPI for 2024 (= 9/30 x 387.3 + 21/30 x 387.5)

And the indexation since issue of 1.70874 for the Sept 2025 coupon = 405.69/237.42 where 237.42 is the lagged RPI at issue which is interpolated from the August/September 2011 RPI (= 236.1 x 8/30 + 237.9 x 22/30) 

And the indexation of 1.63188 for the Sep 2024 coupon = 387.44/237.42

Thanks for simplifying it, mate