We update our economic assumptions on a monthly basis. We use market values for future interest rates on fixed and RPI-linked gilts as shown in the Financial Times on the first working day of each month to update the immediate interest rate and retail price inflation (RPI) assumptions.

We use 15+ year gilt values to reflect that our valuations are for income streams that will take place over many years in the future. Current interest or inflation values do feed into the long-term values being assumed by the market, but are only one of many factors. Our economic assumptions will therefore rarely reproduce the current headline interest or inflation rates.

We have a number of other factors on the realtionship between RPI and the other inflation-linked assumptions such as the Consumer Price Index (CPI), and between RPI and National Average Earnings, that we review on at least an annual basis.We similarly review our long-term equity growth assumption that underlies our discount basis.

We also validate our annuity interest rate assumption by comparing our annuity rates against current insurer annuity rates on a regular basis.