AZN, ULVR, SHEL: Blue-chip stocks you may pick as fears of recession rise

The UK economy is going through a slowdown, and millions of households are facing the biggest squeeze on income due to the all-time high levels of inflation. In March, it climbed to 7%, the highest in three decades, and the Bank of England (BoE) has warned that it may reach 10% by the end of this year. The skyrocketing food and energy bills have forced people to cut expenses on necessities, resulting in a cost-of-living crisis.

Amid the fears of spiralling costs, experts have warned that the economy may slide into recession in the coming months. The National Institute of Economic and Social Research (NIESR), a UK-based think-tank, has said the country's economy is heading towards a technical recession later this year.

©2022 Kalkine Media®

In its quarterly outlook released on Wednesday, NIESER said that around 1.5 million households across the country are estimated to face problems with paying for food and energy bills over the next year due to the rising prices.

The think tank said that the Gross Domestic Product (GDP) is expected to grow by 3.5% in 2022, registering a decline in the third and fourth quarters of the year. The fall in GDP in two successive quarters is a commonly used definition of recession.

Bank of England must hike interest rates: NIESER

NIESER further said that the Bank of England needs to raise the interest rates to 2.5% and maintain it till 2025 to bring the high inflation levels under control. Notably, the BoE had suggested last week that it is possible to achieve price stability without raising interest rates to this level.

The fears of recession have concerned the UK investors, who are trying to maximise their profits in the situation. Let us examine a few stocks that could perform better than others during a recession.

AstraZeneca Plc (LON: AZN)

AstraZeneca is a British-Swedish pharmaceutical giant headquartered in Cambridge, UK. The company is listed on the FTSE 100 index and reported total revenue of $11.4 billion in the first quarter of 2022.

At 8:35 am GMT+1 on 11 May 2022, the company's shares were trading at GBX 10,192.00. With a current market capitalisation of £158,758.08 million, AstraZeneca's share price has appreciated by 32.56% over the last one year. Its year-to-date (YTD) return stands at 17.91%.

Unilever Plc (LON: ULVR)

Unilever is a British multinational and one of the world's biggest fast-moving consumer goods (FMCG) firms. The company has 400 brands like Ben & Jerry's, Dove, Lifebuoy, Axe, and Sunsilk under its portfolio. In the first three months of 2022, the company saw a 7.3% rise in the underlying sales growth over the same period in 2021, while its turnover increased by 11.8%.

Unilever has a current market cap of £94,618.56 million. Over the last one year, its share value has fallen by 14%. The company's shares were trading at GBX 3,662.50, down 1.03% at 8:42 am GMT+1 on 11 May 2022.

Shell Plc (LON: SHEL)

Shell is a British multinational oil and gas company listed on the FTSE 100 index. The company has been in the spotlight recently after it reported its highest ever profits in a quarter for Q1 2022. It is also facing the pressure of a windfall tax following the strong profit growth.

The market cap of the oil giant currently stands at £167,464.96, and its one-year return is 57.80%. The year-to-date return is over 38%. Shell's shares were trading at GBX 2,250.50, up 0.76% at 8:52 am GMT+1 on 11 May 2022.