VOD, IMB, BATS: Blue-chip stocks to watch as BoE battles rising inflation

Highlights

• BoE might not be having the adequate resources to sustain the UK’s competitiveness, as per a policymaker designate.
• BoE’s policymaker Michael Saunders has warned that the interest rates could hit the 2% mark or even surpass it over the coming year.
• Nadhim Zahawi, the new chancellor, has reportedly pledged to control the soaring prices.

The UK government is set to reveal a draft law this week, exploiting its post-Brexit liberties for establishing its own financial rules. However, according to the statements given on Monday by a policymaker designate, the Bank of England (BoE) might not be having the adequate number of resources for fulfilling an additional goal of retaining the UK’s status as a competitive global financial hub.

Lawmakers have shown uncertainty regarding regulators being provided with a secondary competitiveness remit, as they are concerned about the banks ending up getting bailed out as it happened over a decade ago.

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With the inflationary situation worsening in the UK, the BoE has been carrying out rate hikes. On Monday, BoE’s policymaker Michael Saunders has given a warning that the interest rates could hit the 2% mark or even surpass it over the coming year if the inflationary trend continues. This is an alarming situation as 2% is actually the UK Government’s inflation target.

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The inflation level in the country is currently at a 40-year high of 9.1%. As per BoE’s estimates, the rate may go up to 11% by the end of this year. The cost-of-living crisis facing the UK is growing day by day and Brits are finding it hard to tackle the rising food and fuel bills. Nadhim Zahawi, the new chancellor, has reportedly pledged to control the soaring prices. In his first speech as chancellor, he is expected to discuss sound public finances and financial services regulation.

Amid the rising inflation and political chaos, UK investors may consider buying the following blue-chip dividend stocks to protect and potentially multiply their hard-earned money. 

Vodafone Group plc (LON: VOD)

Leading telecom firm Vodafone Group Plc on 19 July had a positive EPS of 0.07 with it providing a yearly dividend yield of 5.9% to its investors. The firm offered its investors one-year and YTD returns of 12.20% and 16.53%, respectively. VOD shares were experiencing a surge of 0.54% at around 11:45 AM (GMT+1) on Tuesday and were trading at GBX 130.82.

Imperial Brands plc (LON: IMB)

British tobacco brand, Imperial Brands plc, falls under the FTSE 100 index and on 19 July its shares were up by 1.32% at around 11:50 AM (GMT+1) on Tuesday and were trading at GBX 1,885.00. IMB had a market cap of £17,677.59 million with a positive EPS of 3.00 and a yearly dividend yield of 7.5%. The tobacco firm had both one-year and YTD returns in favourable positions, giving them returns of 17.71% and 16.30%, respectively.  

British American Tobacco plc (LON: BATS)

UK-based cigarette producer, British American Tobacco plc, on 19 July had a market cap of £78,596.44 million. This falls FTSE 100 share had a positive EPS of 2.97, with a yearly dividend yield of 6.2% to its investors. The company has offered decent one-year and YTD returns to its shareholders as of 19 July, which stand at 23.05% and 28.66%, respectively. BATS shares were experiencing a surge of 0.90% at around 11:55 AM (GMT+1) on Tuesday and were trading at GBX 3,516.00.