In the past month, the current funding ratio has risen from 110.9% (end of September) to 113.1% (end of October). After a fall in the third quarter, interest rates rose again in October. This is because the US and China seem to be getting closer to resolving the trade dispute. In addition, a firm Brexit has been averted in the short term now that the EU has agreed to a third extension until 31 January 2020. This interest rate increase did indeed reduce the value of the fixed-interest portfolio. But this negative effect on the funding ratio was more than offset by a stronger fall in pension liabilities. Stock markets also responded positively to developments regarding the trade dispute and Brexit. The value of the portfolio with real values increased in the past month. On balance, the rise in interest rates and positive stock markets led to an increase in the current funding ratio by 2.2 percentage points in October.
The increase of 2.2 percentage points is not immediately visible in the level of the policy funding ratio. This is because the policy funding ratio shows the average of the current funding ratio over the past 12 months. The policy funding ratio at the end of October was 114.3%.
Chart funding ratio