watsonwyatt (Watson Wyatt) The use of derivatives by UK pension funds to hedge risk has fallen significantly so far in 2008 because of the ongoing credit crisis. The result is a shrinking UK inflation-linked market for end users (excluding intra-bank trades) which is only expected to be in the range of £20 billion -£25 billion this year, having reached £35 billion in 2007. This marks a pause in a rapid growth trend which started in 2004 when the estimated size of the UK market was £3 billion.

Watson Wyatt