RIO, DEC, ANTO: FTSE stocks to explore amid recession alarms

Highlights

• The continuously escalating cost-of-living crisis is pushing the UK towards a recession, as per CBI.
• The UK’s GDP growth outlook for 2022 has been substantially slashed by the business trade body from 5.1% to 3.7%.
• Over 2022, the disposable income of UK households falls by 2.3%, which marks the biggest yearly fall since the mid-1950s. 

Amid the rising inflationary pressures and contracting growth, the UK economy is headed towards a slowdown. According to the Confederation of British Industry (CBI), the continuously escalating cost-of-living crisis in the country is showing no signs of a slowing down and is pushing the UK towards a recession.

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The UK’s GDP growth outlook for 2022 has been substantially slashed by the business trade body from 5.1% to 3.7%. The outlook has been downgraded for 2023 as well, from 3% to 1%. The weak economic growth can be majorly attributed to the soaring inflation levels, which have significantly squeezed the households’ budgets. This has resulted in lower consumer spending and falling business confidence all over the country.

By 2022, the disposable income of UK households falls by 2.3%, which marks the biggest yearly fall since the mid-1950s. Fears of a recession have been looming over the UK, but technically a recession might be avoided mainly due to the high business investments. During the pandemic, Chancellor Rishi Sunak introduced major tax reliefs to motivate business reinvestments.

With the ending of the super-deductions, capital spending is all set to decline in the latter half of 2023, which may further worsen the economic situation. Thus, the Government must work together with the businesses to effectively tackle the ongoing crisis. This Thursday, the Bank of England is all set to go for another interest rate hike to counter the impact of rising inflation.

Let’s look at 3 UK stocks offering dividends that investors may keep an eye on amid recession fears.

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Rio Tinto plc (LON: RIO)

The shares of the Anglo-Australian mining giant, Rio Tinto plc, were down by 1.34% at 8:20 AM (GMT+1) on 13 June 2022, at GBX 5,614.00. On a year-to-date basis, the FTSE 100 company has given its shareholders a return of 14.84% as of 13 June 2022. The current market cap of the company stands at £71,084.60 million and it is offering an annual dividend yield of 11.3% as of 13 June 2022.

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Diversified Energy Company plc (LON: DEC)

The shares of the independent oil and gas production business, Diversified Energy Company plc, were down by 1.39% at 8:22 AM (GMT+1) on 13 June 2022, at GBX 120.50. On a year-to-date basis, the FTSE 250 company has given its shareholders a return of 15.39% as of 13 June 2022. The current market cap of the company stands at £1,039.37 million and it is offering an annual dividend yield of 11% as of 13 June 2022.

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Antofagasta plc (LON: ANTO)

The shares of the Chilean mining business, Antofagasta plc, were up down by 1.26% at 8:25 AM (GMT+1) on 13 June 2022, at GBX 1,415.00. On a year-to-date basis, the FTSE 100 company has given its shareholders a return of 6.01% as of 13 June 2022. The current market cap of the company stands at £14,127.33 million and it is offering an annual dividend yield of 8.6% as of 13 June 2022.