ABI: increase in inflation makes a sensible Discount Rate more important than ever

Commenting on the 0.5% increase in CPI which takes it above the Bank of England's target for the first time since September 2013, Huw Evans, Director General of the Association of British Insurers, said:

"The large increase in inflation today makes it even more absurd that the Ministry of Justice has decided to massively increase compensation costs by cutting the Discount Rate. This will inevitably feed through to premium prices driving inflation even higher, a reality the Government's own fiscal watchdog the Office of Budget Responsibility has confirmed. With further pain to come in June when Insurance Premium Tax will go up from 10% to 12%, it is more important than ever that Government bring in a more sensible Discount Rate as asoon as possible."