Inflation

Question 1

What should the TPs make allowance for the impact of?

Answer 1

1. Future outgo of wage inflation
2. Price inflation
3. Court decisions
4. Other economic or environmental causes

Question 2

When is explicit allowance for inflation required?

Answer 2

1. Where past inflation rates have been unstable

2. If future inflation is expected to differ from past inflation

Question 3

What should form the basis for assumptions on future inflation rates?

Answer 3

An analysis of past escalation

Question 4

What should be considered for the inflation index used?

Answer 4

Should be appropriate the the entity and class of business concerned