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Highlights
- CPI inflation has unexpectedly gone down from 10.1% in the year to July to 9.9% in August, as per ONS.
- Markets are betting that the rates would likely be hiked by another 50, or even 75 basis points, to to 2.25% or 2.50%, respectively.
- In between these developments, investors can assess the performance of penny stocks, which have the potential to offer decent returns but are considered as risky investments.
The Consumer price index (CPI) inflation witnessed a slight cooling off as it dipped to 9.9% in August, according to the recent data released by ONS. While the UK inflation levels eased last month after witnessing double digit growth for the first time in over four decades, core prices kept following the upward trend. Before the Bank of England’s (BoE) meeting next week, markets are betting that the rates will likely be hiked by another 50 or even 75 basis points.
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While fuel prices moved downwards, food costs fuelled the inflationary pressures last month. However, it was the first time the inflation rate fell since September last year. Nevertheless, core prices went up from 6.2% to 6.3%.
The interest rate, which currently stands at 1.75%, may be raised to 2.25% or 2.50% with a 50 or 75bp hike, respectively. As recession alarms ring over the UK economy, the BoE is under immense pressure to tackle the inflationary crisis by tightening the monetary policy.
In between these developments, investors can assess the performance of penny stocks, which have the potential to offer decent returns but are considered risky investments. Generally, penny stocks trade under £1 and hold a market capitalisation of less than £100 million.
Let’s look at the performance of a few penny stocks based on their annual and YTD (year-to-date) returns.
Borders and Southern Petroleum plc (LON:BOR)
On Friday, the Borders & Southern Petroleum plc shares were trading at GBX 5.29 at 12:35 PM (GMT+1). The AIM constituent currently holds a market cap of £31.30 million. As of 16 September, the energy firm’s returns on a one-year basis stand at 588.05%. Meanwhile, on Friday, BOR’s returns on YTD basis stand at 711.13%, with its EPS at 0 at present.
Egdon Resources plc (LON:EDR)
The shares of the independently functioning company focused on oil and gas, Egdon Resources plc, were trading at GBX 6.25, down by 7.41%, at 12:45 PM (GMT+1) on Friday. The AIM constituent currently holds a market cap of £35.45 million. As of 16 September, the energy firm’s returns on a one-year stand at 343.88%. The company’s EPS stands at -0.01 at present.
Harvest Minerals Ltd (LON: HMI)
The shares of the manufacturer of organic fertiliser, Harvest Minerals Ltd, were trading at GBX 10.80, up by 2.37%, at 12:47 PM (GMT+1) on Friday. The AIM constituent currently holds a market cap of £19.96 million. As of today, the chemical firm’s returns on a one-year basis stand at 188.85%, and on the YTD basis, it stands at 136.59%. The company’s EPS stands at -0.02 at present.
