NWG, HSBA, LLOY: Stocks to watch amid CPI drop - Kalkine Media

May 25, 2023 11:29 AM BST | By Manu Shankar
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Highlights

  • According to the Office for National Statistics (ONS) figures, Consumer Price Index (CPI) dropped to 8.7% on a year-on-year basis in April.
  • According to the ONS report, while food and beverages rose in April, gas prices dropped by 1.42 percentage points in April.
  • Economists, however, are not entirely counting out another interest rate hike by the Bank of England (BoE) next month.

While the United Kingdom’s inflation has been in double digits since last year, it looks like there is finally it’s the end of the tunnel. Many in Britain are confident that inflation will roll back to single-digit figures by next month.

According to the Office for National Statistics (ONS) figures, Consumer Price Index (CPI) dropped to 8.7% on a year-on-year basis in April from the current 10.1% in March. Having said that, the CPI rose by 1.2%, above the estimated 0.8%. Economists believe this sustained drop, the first time in eight months, could signal that inflation is easing. According to the ONS report, while food and beverages rose in April, gas prices dropped by 1.42 percentage points in April.

While the CPI may have witnessed a drop, economists are not entirely counting out another interest rate hike by the Bank of England (BoE) next month. Earlier this month, the BoE was forced to raise the interest rate to 4.5% amid persisting inflation. The BoE governor acknowledged that the Central Bank failed to forecast the inflation situation and that there are very big lessons to learn from its failure.

Let’s explore some banking stocks investors can keep a keen eye on.

Natwest Group plc (LON: NWG)

The Edinburgh-based Natwest Group plc is an FTSE-100 constituent. The leading banking firm in the country enjoys a market cap of £25,408.20 million with a P/E ratio of 10.74. On 25 May, Natwest was trading at GBX 267.50 and down by -0.22% at the time of writing. Natwest Group offered a range of banking and financial services with an EPS of 0.25, giving its investors positive returns of 14.65%.

HSBC Holdings PLC (LON: HSBA)

HSBC Holding Plc is one of the world’s leading investment banking firms, with a market cap of £ 119,769.61 million. With operations across Africa, Europe, Asia, North America, Oceania and South America, HSBA on 25 May was witnessing a fall of -0.10% and was trading at GBX 599.60. HSBA stock over the past year has given a return of 16.27% and 16.40% on a YTD basis.

Lloyds Banking Group Plc (LON: LLOY)

The FTSE-100 constituent, Lloyds Banking Group Plc, held a market cap of £30,584.13 million. The Lloyds Banking Group’s primary activities include retail and commercial banking, insurance etc., and it is one of the largest digital banks in the country. On 25 May, the bank witnessed a fall of -1.12%% and was trading at GBX 46.24 at the time of writing. Over the past year, the stock has given its investors a 4.75% return with a P/E ratio of 5.27. 


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