London, March 20, 2026, 15:04 GMT
National Grid (NG.L) shares fell about 2% on Friday to 1,246.5 pence, extending losses this week as investors sold rate-sensitive UK utility stocks. The stock traded between 1,244.5 pence and 1,284.5 pence, against a previous close of 1,272 pence. 1
The move matters because National Grid had been one of the market’s stronger utility names after it raised its forecast for 2027 adjusted earnings per share growth to 13%-15% earlier this month as it enters a new regulatory period. Friday’s retreat shows how quickly enthusiasm over that outlook can run into trouble when yields surge. 2
London’s FTSE 100 was down 0.1% by 1039 GMT and the UK energy sector slipped 0.9% after the Bank of England kept rates at 3.75% on Thursday and warned inflation posed a bigger risk than slower growth. Traders are now pricing about a 60% chance of a quarter-point rise by April and as many as three increases by year-end, Reuters reported. 3
Utilities tend to trade like bond substitutes because their cash flows are steady and regulated, so higher government bond yields can hurt their relative appeal. Britain’s 10-year gilt yield climbed to 4.93%, its highest since 2008, and Investec economist Sandra Horsfield said it was “very dangerous” for central banks to assume an energy shock would prove transitory. 4
Jefferies added company-specific pressure. The broker cut National Grid to Hold from Buy on Wednesday with a 1,410 pence target, and analyst Ahmed Farman pointed to the stock’s premium valuation, a limited run of regulatory catalysts through the rest of the year and higher real rates — interest rates adjusted for inflation — as headwinds. 5
The pressure has not been limited to National Grid. SSE fell 2.11% on Wednesday to 26.85 pounds and Severn Trent lost 1.92% to 31.16 pounds, both underperforming the wider market as investors trimmed exposure to UK defensive utilities. 6
Thursday’s broader UK selloff underlined the shift. The FTSE 100 closed down 2.4% at a two-month low, and Nick Saunders, chief executive of Webull UK, said the inflation threat was “a more important battle” for policymakers than low rates. 7
The risk for National Grid holders is now fairly plain: if oil and gas stay high and the Bank follows through with tighter policy, valuation pressure could keep building even after the company’s upgraded growth outlook. If energy prices cool and yields settle, the shares could regain some footing, but for now the macro picture is setting the pace. 4
