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Highlights:
- According to the ONS, UK inflation reached 9.1% in May, the highest since 1982.
- This is more than four times the 2% target of the Bank of England.
There is no relief in sight for millions of Britons facing a significant squeeze on household budgets as the inflation levels continue to show an upward trend. In the latest data shared by the Office for National Statistics (ONS), inflation in May rose to 9.1%, the highest in four decades. It has broken the previous month's record when it hit 9%, again the highest since 1982.
While inflation rose 9.1% in the year to May 2022, it rose by 0.7% on a monthly basis. The monthly rise was 0.6% in May 2021.
According to ONS, the rising prices of food and non-alcoholic beverages were the key contributors to the high inflation, followed by furniture and household goods. Transport, as well as alcohol and tobacco, also contributed to the change in the annual CPI inflation rate.
On the other hand, the rise was slightly offset by recreation and culture, followed by clothing and footwear, the data showed.
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Bank of England raised its forecast last week
The figures come just days after the Bank of England warned that inflation may reach 11% later this year. Last week, the central bank raised the interest rates to 1.25% from 1%, saying it would 'act forcefully' to indications of persistent inflationary pressures.
The bank also raised its earlier forecast of 10% peak inflation in October, saying it may reach slightly above 11%.
Amid the latest inflation numbers from the ONS, let us look at some stocks that may act as inflation hedges.
Imperial Brands Plc (LON: IMB)
Imperial Brands manufactures, markets, and sells tobacco and tobacco-related products. Its products are sold in more than 150 countries across the globe.
Shares of the company were up by 0.19% at GBX 1,834.00 at 11:43 am on 22 June 2022. The FTSE 100 constituent has provided shareholders with a 15.30% return in the past one year, and the year-to-date or YTD return stands at 13.24%. At present, the company holds a market cap of £17,397.22 million.
Centrica Plc (LON: CNA)
Centrica is a UK-based firm that supplies electricity and gas in the UK and Ireland. Last week, the company signed an agreement with Norway's Equinor for additional winter gas supplies.
The company's one-year return to the shareholders currently stands at close to 60%, and the YTD return stands at 14.87%. The shares were 2.75% up at GBX 82.08 as of 11:58 am GMT+1 on 22 June 2022.
Mediclinic International Plc (LON: MDC)
The London-based company provides specialist services in the healthcare sector. It operates 74 private hospitals, 20 day clinics, 22 outpatient clinics, and five subacute hospitals, among others.
Shares of the company were trading at GBX 440.40 as of 11:52 am GMT+1 on 22 June 2022, with a market cap of £3,243.87 million. The shares have provided a return of 38.49% to investors over the past year. The YTD return currently stands at 37.45%.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated, considering the associated risks.
