AUS
NZ
UK
CA
USA
IND
Highlights:
- UK public's expectations for future inflation have cooled recently, as per a new survey.
- The Bank of England has been struggling to keep inflation in check.
The UK is currently reeling under the pressure of 40-year high inflation. Electricity and food bills are soaring, and fuel prices have frequently been flirting with record highs. The Bank of England (BoE) has forecast that inflation may exceed 11% in autumn when the next energy price cap revision comes into effect. Moreover, several reports have claimed that the country might be pushed into a recession. However, the UK public's expectations for future inflation have cooled in recent weeks.
As per a survey by the Bank of America, consumer inflation expectations in recent weeks have continued to fall. The five-year expectations for inflation touched the lowest levels recently in almost a year, according to Robert Wood, an economist with Bank of America Global Research.
A similar trend was reported by the closely watched Citi/YouGov survey last month, which showed a drop in long-term inflation expectations.
Image source: © 2022 Kalkine Media®
The latest survey comes as some relief for the Bank of England, which has expressed concerns over the inflation becoming persistent. On Monday, BoE governor Andrew Bailey also expressed hope that inflation will see a sharp decline next year. He also told the treasury select committee that inflation is expected to reach the bank's 2% target in the next two years.
Against the backdrop of this information, here are some FTSE-listed stocks that investors may consider as inflation hedges. While they may not be inflation-proof, they have the potential to perform better in the present scenario than others.
British American Tobacco Plc (LON: BATS)
The world's largest tobacco company is headquartered in London and is a constituent of the FTSE 100 index. Investors generally prefer tobacco stocks as there is a steady demand for tobacco products regardless of economic conditions. British American Tobacco holds a market cap of £76,475.47 million at present. The stock has climbed by 22.40% over the past year, while its year-to-date return is 24.14%. Shares of the tobacco firm were 0.12% higher as of 11:56 am on Tuesday and traded at GBX 3,393.00.
Reckitt Benckiser Group Plc (LON: RKT)
The British multinational consumer goods maker owns several popular healthcare and hygiene brands like Dettol, Mortein, Strepsils, Air Wick, Durex, Lysol, Harpic, etc. It is also listed on the blue-chip FTSE 100 index. Shares of the company have fallen marginally by -1.06% over the past one year and have risen by 0.30% on a year-to-date basis. With a market capitalisation of £45,315.54 million, the shares were trading at GBX 6,362.00, up 0.44%, at 12:03 pm on 12 July 2022.
Centrica Plc (LON: CNA)
Centrica is an energy utility company and a leading electricity and gas supplier in the UK. It is in talks with the government to reopen a mothballed gas storage facility in anticipation of Russia cutting down supplies to Europe. Centrica holds a market cap of £4,892.65 million, and its share value has risen by nearly 60% in the past 12 months. Its EPS is currently at 0.21. Shares of the company were 0.99% up at GBX 83.64 as of 12:09 pm on 12 July 2022.
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 taking into consideration the associated risks.
