Trading on inflation
Inflation is one of the most heavily discussed economic metrics in financial markets. Discover how to trade inflation using our UK and US inflation indices.
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Get info fast via our instant help and support portal. Available for account queries, ProRealTime, product info and more.
Visit help and support for more information.
Call 0800 409 6789 or email helpdesk.uk@ig.com if you have any questions about trading or investing. We're available 24/7 between 8am Saturday and 10pm Friday.
Contact us 0800 409 6789
Call 0800 195 3100 or email newaccounts.uk@ig.com to talk about opening an account.
Contact us 08001953100
Get info fast via our instant help and support portal. Available for account queries, ProRealTime, product info and more.
Visit help and support for more information.
Get info fast via our instant help and support portal. Available for account queries, ProRealTime, product info and more.
Visit help and support for more information.
Call 0800 409 6789 or email helpdesk.uk@ig.com if you have any questions about trading or investing. We're available 24/7 between 8am Saturday and 10pm Friday.
Contact us 0800 409 6789
What is inflation and why should you trade it?
Inflation is, essentially, the increase in the price of products and services in an economy – it’s measured using a consumer price index (CPI). Keeping inflation levels down is typically the responsibility of a central bank, such as the Bank of England (BoE) or an equivalent body. Inflationary changes can have a huge impact on the value of a currency, consumers’ purchasing power and banks’ monetary policies.
The BoE has made £895 billion in bond purchases in an effort to lower interest rates and increase money supply – this is called quantitative easing. Almost half of this was spent between mid-2020 and the end of 2021, due to the Covid-19 pandemic. All this extra money that’s entering the economy has a big impact on the price of products and services – ie inflation.
Many people want to trade inflation because it can be used as a hedging tool against assets impacted by it, such as stocks and bonds. Hedging is the act of strategically placing trades so that a profit or a loss in one position, is offset by changes to the value of another. The ability to get direct exposure to the inflation rate by speculating on assets is another reason why some people might want to trade on inflation.
How to trade inflation
You can now get exposure to inflation all in one place with our unique inflation indices, which you won’t find anywhere else. With us, you’ll take a position on the indices using spread bets and CFDs. Both are derivative products, which means you can:
Go long or short
Trade on leverage
Get tax benefits1
When trading, you’ll never take ownership of an asset, and will instead take a position on the price of the indices rising or falling in value. Note that all trading carries risk. This is only amplified when trading on leverage. Learn more about how to manage your risk.
To trade inflation with us, follow these steps:
1. Learn about trading on inflation
2. Open a spread betting or CFD trading account (or both)
3. Choose whether to trade our UK or US Inflation Index
4. Select you deal size and take steps to manage your risk
5. Open your position
Our inflation indices
Our inflation indices contain a selection of gilt and TIPS ETFs that have a correlation with our 5-year UK or US inflation-linked bond yields, a commonly used benchmark for forward looking inflation expectations.
We offer a UK Inflation Index and a US Inflation Index. Both are provided by BITA and priced according to the weight of their constituents.
Our UK Inflation Index contains five gilt ETFs. The current index composition is:
| INXG | 45%* |
| VGOV | 20%* |
| IGLT | 15%* |
| GLTS | 15%* |
| IUKP | 5%* |
* Figures are approximate
Our US Inflation Index contains five TIPS ETFs. The current index composition is:
| TIP | 20%* |
| SCHP | 20%* |
| VTIP | 20%* |
| STIP | 20%* |
| SPIP | 20%* |
* Figures are approximate
Why trade inflation with us?
Trade the movements of the only inflation indices in the world
Get direct exposure to UK and US inflation rates through our unique indices
Trade key ETFs that benchmark inflation with a single position
Get the best execution on your trades with our industry-leading tech
Open a trading position with spreads from just 2 points
Enjoy an award-winning platform with the world’s No.1 trading provider1, 2
Key inflation markets
Costs and charges
- Spread betting costs
- CFD trading costs
Spread betting is a form of leveraged trading, meaning you can win, or lose, a significant amount more than you deposit initially.
Your key payment for trading inflation using this method is the spread – the difference between the buy and sell price of an asset. Essentially, this is our commission for executing your trade. We work to keep our spreads among the lowest in the business.
Margin |
Minimum margin requirement of 20% for retail clients trading the UK or US Inflation Index |
Spread |
From 2 points on the inflation indices |
Overnight funding |
Overnight funding applies to positions held overnight on cash (spot) positions only. Forwards do not incur overnight funding charges. Learn more about overnight fees |
CFD trading is also a form of leveraged trading, so you can gain or lose a significant amount more than you deposit. With share CFDs, you will be charged a commission. With all others markets, you’ll be charged a spread.
Margin |
Minimum margin requirement of 20% for retail clients trading the UK or US Inflation Index |
Spread |
From 2 points on the inflation indices. We don’t attach our own spread to share CFDs |
Commission |
Commission from £10 for UK-listed shares |
Overnight funding |
Overnight funding applies to positions held overnight on cash (spot) positions only. Forwards do not incur overnight funding charges. Learn more about overnight fees |
Open an account now
Open an account now
Fast execution on a huge range of markets
Enjoy flexible access to 17,000+ global markets, with reliable execution
Deal seamlessly, wherever you are
Trade on the move with our natively designed, award-winning trading app
Feel secure with a trusted provider
With more than 47 years of experience, we’re proud to offer a truly market-leading service
Open an account now
Open an account now
Fast execution on a huge range of markets
Enjoy flexible access to 17,000+ global markets, with reliable execution
Deal seamlessly, wherever you are
Trade on the move with our natively designed, award-winning trading app
Feel secure with a trusted provider
With more than 47 years of experience, we’re proud to offer a truly market-leading service
Trade inflation on a live account
You can open an account with us in three steps.
Fill in our online form
Answer a few questions about your trading experience
Wait for approval
We’ll verify your identity before processing your application
Fund your account
Start trading or continue practising on a risk-free demo account
FAQ
How can I trade on inflation?
You can trade on inflation with us thanks to our unique inflation indices – a first, which you won’t find anywhere else. You can trade both UK and US inflation with a single position. Our inflation indices track benchmark gilt and TIPS ETFs listed on major exchanges.
To get started, open a spread betting or CFD trading account. You can use both to trade our inflation indices on leverage, which means you only need to put down a deposit to open your position. You’ll still get exposure to the full value of the trade – and profits and losses will be based on this amount, not your deposit.
It’s very important to note that trading is a high-risk activity. Your losses can significantly outweigh your deposit, as well as any profits that you make along the way. So, while trading gilt and TIPS ETFs give you possible inflation protection, the risk of losing money is still high. Always take care to manage your risk using our in-platform tools.
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1 Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.
2 Best trading platform as awarded at the ADVFN International Financial Awards and Professional Trader Awards 2021. Best trading app as awarded at the ADVFN International Financial Awards 2021.
3 Based on revenue excluding FX (published financial results, October 2020).
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