5 FTSE stocks to keep on your radar with rising inflation

4 min read | December 08, 2021 12:40 AM AEDT | By Rishika Raina

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5 FTSE stocks to keep on your radar with rising inflation — Image source: Bro Crock, Shutterstock.com

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Highlights

Inflation level in the UK can easily increase to more than 5% by the spring of 2022, as per BoE.

Inflation level in the UK is already way above the BoE’s 2% target, leading to increasing pessimism among Britons.

The sectors which are inflation resistant include energy, equity REITS, consumer staples, industrial, and financial.

Inflation in the UK is putting unwanted pressure on Britons. Experts have said that the situation may worsen in the coming months as Omicron variant of coronavirus might play havoc. The monetary policy chief of the Bank of England (BoE), Ben Broadbent, has recently stated that the inflation level in the UK can easily increase to more than 5% by the spring of 2022. Inflation level in the UK is already way above the BoE’s 2% target, which has been increasing the pessimism among Britons as the UK is potentially approaching economic stagnation.

As the living standard of Britons has started depleting due to rising inflation, the wage demand is expected to go up and potentially lead to a wage/price spiral, which could prove to be devastating for the UK economy. The most significant factor to impact Britons would be the changes in the energy price cap by Ofgem due to soaring energy costs leading to collapse of many energy suppliers. The global supply chain constrains are also playing a role in overall condition of Britons who are facing the wrath of inflation.

It is inevitable for the stock market to get impacted as the monetary policy is tightened and the interest rates jump to counter the impact of rising inflation. However, the resilience of different stocks towards inflation may vary, and some stocks might even benefit as the inflation level goes up. The sectors which are supposed to be inflation resistant are energy, equity REITS, consumer staples, industrial, and financial.

Here are 5 inflation-proof UK stocks belonging to the above-mentioned sectors that investors can buy right now.

Impact of rising inflation on Britons

Royal Dutch Shell Plc (LON: RDSA)

Royal Dutch Shell Plc’s current market cap stands at £68,958.24 million as of 7 December 2021 and it has given a return of 20.61% to its shareholders in the last one year. Its year-to-date return stands at 29.90%. Royal Dutch Shell Plc’s shares were trading at GBX £1,691.60, up by 0.61%, at 10:30 AM (GMT) on 7 December 2021.

British American Tobacco PLC (LON: BATS)

FTSE-listed British American Tobacco PLC recently reported that it is upgrading its products and gradually moving towards new categories of tobacco and nicotine products, and expecting its target market to expand. The current market cap stands at £60,246.59 million as of 7 December 2021 and it has given a return of 1.32% to its shareholders in the last one year. Its year-to-date return stands at -0.90%. British American Tobacco PLC’s shares were trading at GBX 2,685.50, up by 2.29%, at 10:34 AM (GMT) on 7 December 2021.

Diageo plc (LON: DGE)

Diageo plc is into the production of popular alcoholic beverages, which it distributes through its famous chain of brands. The current market cap of the FTSE100-listed company stands at £92,009.93 million as of 7 December 2021 and it has given a return of 35.75% to its shareholders in the last one year. Its year-to-date return stands at 38.86%. Diageo plc’s shares were trading at GBX 3,981.00, up by 0.82%, at 10:41 AM (GMT) on 7 December 2021.

HSBC Holdings plc (LON: HSBA)

The second largest bank in Europe, HSBC Holdings plc, provides specific financial services to its customers. The current market cap of the FTSE100-listed bank stands at £88,947.17 million as of 7 December 2021 and it has given a return of 4.71% to its shareholders in the last one year. Its year-to-date return stands at 16.64%. HSBC Holdings plc’s shares were trading at GBX 442.45, up by 1.18%, at 10:45 AM (GMT) on 7 December 2021.

SEGRO PLC (LON: SGRO)

UK-based REIT Segro PLC is a constituent of the FTSE 100 index. The current market cap of the REIT stands at £16,648.05 million as of 7 December 2021 and it has given a return of 55.98% to its shareholders in the last one year. Its year-to-date return stands at 48.04%. Segro PLC’s shares were trading at GBX 1,411.00, up by 1.69%, at 10:48 AM (GMT) on 7 December 2021.

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