Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

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.

Call 0800 195 3100 or send us an email with any questions about opening a trading or investment account between 8am and 6pm (UK time) on weekdays.

Contact us 0800 195 3100

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

Call 0800 195 3100 or send us an email with any questions about opening a trading or investment account between 8am and 6pm (UK time) on weekdays.

Contact us 0800 195 3100

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

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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
and ETFs. No commission on the UK or US Inflation Index

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 more than 18,000+ 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 45 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 more than 18,000+ 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 45 years of experience, we’re proud to offer a truly market-leading service

Start trading now

Log in to your account now to access today’s opportunity in a huge range of markets.

Start trading now

Log in to your account now to access today’s opportunity in a huge range of markets.

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

What are gilts and TIPS?

Gilts are bonds issued by the UK government. They can either be conventional, ie denominated in British pounds, or index-linked. The latter means that the gilts have coupons that are adjusted in line with the Retail Price Index (RPI) measure of inflation.

TIPS, short for total inflation protected securities, are a form of government security that’s indexed to a measure of inflation. They’re designed as a tool that could protect traders and investors against inflation, and the erosion of the value of money. The return of each security is built to match. As inflation rises, so does the principle value of the security, along with the interest it pays out.

Not everyone can trade these securities due to their complicated nature – that’s where ETFs come in. These funds provide a more accessible route to possible inflation protection. They each contain a range of gilts or TIPS that trade on major exchanges like the LSE, NYSE and Nasdaq.

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).