Index change will make euro entry easier

Gordon Brown announced on 9 June the Bank of England's inflation target is to change to the Harmonis...

Gordon Brown announced on 9 June the Bank of England's inflation target is to change to the Harmonised Index of Consumer Prices (HICP) from the Retail Price Index, excluding mortgage interest (RPIX). While we await further details, to be announced in November's pre-budget report, what does it mean for investors and why has he taken this course of action? The difference this will make to investors, private or professional, will most likely be felt through inflation and interest rates. We do not expect a move to an HICP target to trigger interest rate cuts, despite HICP inflation of 1.6%...