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Highlights
- Four-fifth of manufacturers in UK are planning to raise prices of manufactured goods in the next three months.
- The consumer price index (CPI) increased to 5.5% in January from 5.4% in December, and the Bank of England has predicted that inflation will peak in April to around 7.25%.
A major chunk of manufacturers in the UK are planning to hike prices in the next three months, according to a survey that highlights the pressure of inflation on the UK economy.
The Office for National Statistics (ONS) data shows that the measure of inflation, the consumer price index (CPI) has increased to 5.5% in January from 5.4% in December 2021. The Bank of England has predicted that inflation will peak in April to around 7.25%, when energy regulator Ofgem will raise the energy price cap by 54% to around £1,971.
© 2022 Kalkine Media®
The survey published by the Confederation of British Industry highlighted that four-fifth of manufacturers are all set to raise the prices of manufactured goods in the next three months amid increasing Inflation and energy prices. The survey stated that this is the highest reading since December 1976.
The survey showed a net balance of around 20% of factories reporting rising orders, but it was down from 24% in January. However, the export order books improved slightly.
Let us look at five FTSE 100-listed manufacturing stocks that may be impacted.
- Unilever Plc (LON: ULVR)
Unilever Plc is one of the world’s leading fast-moving consumer goods companies, which offers a wide range of food, beauty and personal care, home care and food & refreshment products in over 190 countries and offers more than 400 brands. The FTSE100-listed company has recently reported a 3.4% increase in its turnover to €52.4 billion, 2.9% increase in underlying operating profit to €9.6 billion and 3% increase in dividend per share for FY2021.
Unilever Plc’s shares were trading at GBX 3,841, up by 1.27%, at 10:45 AM (BST) on 23 February 2022, with the market cap of £97,137.46 million.
- Rio Tinto Plc (LON: RIO)
Rio Tinto Plc is the second largest metals and mining company in the world, engaged in manufacturing of copper, iron ore, diamonds, coal, aluminum, gold, uranium, energy, and minerals. The company has announced an increase in free cash flow of US$17,664 million in the FY2021 from US$9,407 in FY2020 and increase in underlying earnings of US$21,094 million from US$9,769 in FY2020. This has enabled the company to pay out highest total dividend ever of 1,040 US cents per shares for 2021.
Rio Tinto Plc’s shares were trading at GBX 5,683, down by 0.14%, at 10:45 AM (BST) on 23 February 2022, with the market cap of £71,036.32 million.
- Glaxosmithkline Plc (LON: GSK)
Glaxosmithkline Plc is a global healthcare company, engaged in the development and manufacturing of pharmaceuticals, vaccines, and consumer healthcare products. The company has recently announced that the new company, to be formed after splitting its Consumer Healthcare division, will be called Haleon. It has recently £34 billion sale in its 2021 full-year results as it saw significant growth across its vaccines, pharmaceutical and customer healthcare divisions.
Glaxosmithkline Plc’s shares were trading at GBX 1,576.80, up by 1.23%, at 10: 45 AM (BST) on 23 February 2022, with the market cap of £79,182 million.
© 2022 Kalkine Media®
- Rolls- Royce Holdings Plc (LON: RR)
Rolls- Royce Holdings Plc is one of the largest gas turbine and aircraft engine manufacturers in the world. The company has announced the completion of the sale of its 23.1% shareholding in AirTanker Holdings Limited to Equitix Investment Management Limited for £189 million.
Rolls- Royce Holdings Plc’s shares were trading at GBX 120.60, up by 2.19%, at 10:45 AM (BST) on 23 February 2022, with the market cap of £9,875.44 million.
- Melrose Plc (LON: MRO)
Melrose Plc is a manufacturing company that is engaged in acquiring, investing, and divesting manufacturing and industrial businesses, with strong fundamentals to improve its performance.
Melrose Plc’s shares were trading at GBX 3,825, up by 0.84%, at 10:45 AM (BST) on 23 February 2022, with the market cap of £97,137.46 million.
Note: The above content constitutes a very preliminary observation or view based on industry 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.
