Inflation hedging by UK pension schemes reached a record high in the second quarter as they looked to control liabilities.
£18.5 billion (€23.3 billion) of inflation hedging transactions were carried out, nearly three times as much as the same period in 2011, according to fund manager F&C’s Liability Driven Investment survey of investment bank trading desks.
Scheme took advantage of the relative cheapness of inflation-linked gilts and RPI swaps.
When asked for their opinions on the likely direction of key rates, respondents overall expected a fall in interest rates and a rise in inflation expectations.
©2012 funds europe