Inflation-linked issuance to hit record $200bn

A record $200bn issuance of new inflation-linked bonds from the UK, US and Europe is forecast this year as global governments seek to finance ballooning budget deficits.

The global market for inflation-protected debt will hit $2trn as governments, such as Germany and Ireland, consider launching such bonds for the first time to help pay for the large build up of debt, reports the Financial Times citing a study by Barclays Capital. Investors have become increasingly worried about the dangers of rising prices in the longer term, boosting demand for inflation-linked bonds. This follows the actions of central banks, which have pumped vast amounts of money into the financial system in the past year. Appetite has also been boosted because linkers are perceiv...