UK utilities slide amid election announcement

UK utilities experienced a significant decline in early London trading on Thursday following Prime Minister Rishi Sunak’s unexpected announcement of a July election, fueling concerns about political instability in the sector, Reuters reported.

Adding to the downward pressure was National Grid’s announcement of plans to raise approximately £7 billion ($8.9 billion) through a rights issue, leading to a nearly 9 per cent drop in its shares.

A UK utilities shares index plummeted by nearly 6 per cent, marking its most substantial one-day decline since March 2020. Drax, Pennon Group, and United Utilities were among the hardest hit, all experiencing drops of more than 5 per cent.

Citi analysts noted, “Overall, we see most risk at the water companies, where we expect most rhetoric and a key political battleground ahead of the next election.”

The broader FTSE All-Share index also saw a decline of 0.1 per cent.