Even financial instruments designed to offer protection against rising prices and the cost of goods have struggled to shield themselves from the ravages of the credit crisis. Inflation derivatives have seen a marked drop in volumes, and liquidity especially has been hit hard by the withdrawal of hedge fund investors.

Jasper Falk, head of inflation trading at JP Morgan in London, said: "The inflation derivatives market is newer than some others, and has been driven by the real need for inflation protection. Things changed very quickly, and we found ourselves in a de-risking world, where the nature of current business has been dominated by the unwinding of risk, not new hedging.