A nominal gilt fixes the pounds it pays while an index-linked gilt fixes their purchasing power, and comparing the two shows the inflation the market is pricing in as impl. RPI.
Two answers to the same need
A reader who wants a known return from UK government debt has two broad choices, and they fix different things. A nominal gilt — what the site calls a conventional gilt — fixes the pounds it will pay. An index-linked gilt fixes the purchasing power of the cash by scaling it to inflation. The same borrower stands behind both, so the credit is identical; the difference is whether the certainty is about cash or about real value.
Comparing the two is not a matter of one being better than the other. It is a matter of which kind of certainty matters for a given purpose, and the comparison is informative because the market prices both on the same day. The gap between them is where the market's view of inflation becomes visible as a single figure, impl. RPI.
The nominal gilt fixes cash, the index-linked fixes real value
A nominal gilt's coupon is a fixed percentage of £100 nominal, paid twice a year, and it repays exactly £100 per £100 held at maturity. The cash is predictable in pounds. Its weakness is that those pounds buy less over time if prices rise, so the cash is certain but the real value is not.
An index-linked gilt's coupon is a real rate applied to a nominal that grows with the index ratio, and its repayment is scaled the same way. The cash is not fixed in pounds, but its purchasing power is what the gilt holds steady. Its weakness is that a holder cannot know the cash amounts in advance, because they depend on the path of inflation. The two gilts fix opposite things, and each gives up something the other keeps.
Comparing a real yield with a nominal yield
The index-linked gilt's return is stated as a real yield: the return after the inflation the gilt is priced for, rather than a cash return. The nominal gilt's return is stated as a cash yield. The two are not directly comparable, because one is measured in real terms and the other in cash. Setting them side by side only makes sense once the inflation embedded in each is accounted for, which is exactly what impl. RPI does.
The idea is straightforward. A nominal yield has to cover both a real return and the inflation expected over the gilt's life. An index-linked yield covers only the real return, because its cash already rises with inflation. So the difference between the two yields is roughly the inflation the market expects — which is what the site reports as impl. RPI, the annual inflation the gilt's real and nominal yields imply.
Impl. RPI bridges the two
Impl. RPI is a derived figure, not a published one. It is what falls out when a nominal yield and a real yield at the same maturity are set against each other, and it represents the market's pricing rather than a forecast by the site. Because it is derived, it moves whenever either of the two yields it rests on moves, even if nothing about inflation itself has changed. The trigger for the underlying inflation data is the Retail Prices Index, which the Office for National Statistics publishes monthly.
Impl. RPI is the inflation that the gilts' own real and nominal yields imply. It is a market-derived number, not a prediction, and it changes as either yield changes.
That distinction matters for reading the number. A high impl. RPI says the market is pricing more inflation into nominal gilts relative to index-linked ones; it does not say inflation will be high. A reader comparing nominal and index-linked gilts is reading the market's implied view, which is a measurement of relative prices rather than a forecast.
The comparison in one table
| Feature | Nominal (conventional) gilt | Index-linked gilt |
| What is fixed | The pounds paid | The purchasing power paid |
| Coupon applied to | £100 nominal | £100 times the index ratio |
| Return named | A cash yield | A real yield |
| The gap between them | — | Impl. RPI |
| What moves with inflation | Nothing — cash is fixed | The coupon and the repayment |
Reading the table row by row makes the trade-off concrete: each kind fixes one thing and leaves the other to the market. A holder who wants a known number of pounds takes the conventional gilt and accepts that inflation may erode it; a holder who wants a known purchasing power takes the index-linked gilt and accepts that the cash is not fixed. Impl. RPI is what lets a reader see the price the market puts on that difference, at a chosen maturity, on a chosen day.
Reading them on the site
The conventional gilts in issue and the index-linked gilts in issue are listed separately, each with its own yield columns. A reader comparing the two should match maturities first, then read the nominal yield against the real yield. The impl. RPI figure beside an index-linked gilt is the bridge: it says what inflation the gap between those two yields implies, at that point on the curve.
Reading the two lists together, rather than one alone, is what makes the comparison possible. A nominal yield on its own says nothing about inflation; a real yield on its own says nothing about the cash. Together, through impl. RPI, they say what the market is pricing between cash and real value — which is the whole point of putting the two kinds of gilt side by side.
Background, not advice
This article explains how nominal and index-linked gilts can be compared; it is general background, not investment, tax or legal advice for any reader's circumstances. Impl. RPI is a market-derived measure rather than a forecast, both kinds of gilt can fall in price before maturity, and real returns are estimates. Real yields, index ratios and the Retail Prices Index come from the gilt's own record and the Office for National Statistics, which are the primary sources.