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Highlights
• UK’s GDP growth may slow down to 3.2% in 2022 and 0.7% in 2023, as per KPMG’s UK Economic Outlook report.
• The Bank of England has been raising the interest rates consistently to balance the inflationary situation while avoiding pushing the country towards a recession.
Recession alarms are ringing over the UK economy as the cost-of-living crisis is spiralling. As per the latest UK Economic Outlook report by KPMG, the country’s GDP growth may slow down to 3.2% in 2022 and it is projected to drop down more to 0.7% in 2023. KPMG UK’s chief economist Yael Selfin has said that the UK economy is facing a severe threat of a mild recession.
With rising geopolitical tensions due to the Russia-Ukraine crisis and soaring commodity prices due to Chinese lockdown, the global supply chains have been disrupted leading to high inflation in most countries. These external factors have the potential to further deteriorate the UK economy and push it towards a recession next year.
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Amid the fears of a slowdown, consumer confidence has taken a hit along with a considerable decrease in business activity. Inflation levels have been hitting the roof, touching a record-high level of 9.1% in May. The Bank of England has been raising the interest rates consistently to balance the inflationary situation while avoiding pushing the country towards a recession.
During this economic upheaval, UK investors have been trying to protect and grow their hard-earned savings. Penny stocks, which are typically traded for under £1 and have a market cap of less than £100 million, are on the radar of investors as they have huge growth potential. However, even though penny stocks offer high returns, they come with a greater risk due to high volatility.
Thus, investors must thoroughly analyse the companies offering penny stocks before investing. Here are 3 UK penny stocks offering decent returns that investors may add to their portfolio.
Borders and Southern Petroleum plc (LON:BOR)
The Borders & Southern Petroleum plc, the oil & gas exploration firm as of 29 June had a market cap of £19.29m. The company has been consistently offering its investors a return of 387.61% on a YTD basis, while its one-year return stood at 235.91% as of Wednesday. The Borders & Southern Petroleum plc’s shares were trading at GBX 3.28 at 12:01 PM (GMT+1) on Wednesday.
Harvest Minerals Ltd (LON: HMI)
Harvest Minerals Ltd is a South America-based business which is engaged in the production of natural fertiliser. As of 29 June, the AIM-listed company holds a market cap of £25.06m. Harvent Minerals Ltd boasted a one-year return of 228.13%, with an over YTD return of over 198% as of 29 June. Harvest Minerals Ltd’s shares were trading at GBX 13.25 at 12:07 PM (GMT+1) on Wednesday.
Egdon Resources plc (LON:EDR)
Egdon Resources plc is an independent business engaged in onshore oil and gas production. As of 29 June, the AIM-listed company holds a market cap of £21.53m. The shareholders of Egdon Resources enjoyed a YTD return of 171.68% with a one-year return of 162.90%. Egdon Resources plc’s shares were trading at GBX 4.15, up by 1.22%, at 12:10 PM (GMT+1) on 29 June 2022.
