London, March 21, 2026, 15:08 GMT
National Grid’s London-listed shares ended Friday at 1,233 pence, down 3.1%, extending a three-session slide as investors sold utilities that tend to suffer when borrowing costs rise. The FTSE 100 lost 1.4% on the day, capping a third straight weekly fall for London stocks. 1
The move matters because it cuts against what had looked like a firmer company story only weeks ago. National Grid said on March 2 it expected adjusted earnings per share to grow 13% to 15% in 2027 as a new UK regulatory period begins, yet Friday’s close left the stock about 13.7% below the 1,428.5p high hit that same day. 2
The immediate pressure came from interest-rate expectations. The Bank of England held rates at 3.75% on Thursday and warned the Middle East conflict could stoke inflation, prompting traders to price in two quarter-point hikes by year-end. “The risk of inflation is a more important battle at this point,” Webull UK CEO Nick Saunders said. 3
By Friday, the yield on the 10-year UK government bond had pushed above 5%, its highest since the global financial crisis, as markets reassessed how long central banks might have to stay tight. “Expectations for a rate cut are fading fast,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management, while ING strategist Padhraic Garvey warned of “a further build-up” in pressure if the war drags on. 4
The trigger is energy. Reuters reported on Saturday that the effective closure of the Strait of Hormuz has halted 20% of global oil and liquefied natural gas flows since Feb. 28; Britain is especially exposed because gas still generates about 30% of its electricity and heats more than 70% of homes. Household bills are capped quarterly, but some analysts quoted by Reuters are already forecasting a 10% rise in the cap from July. 5
That backdrop lands hard on National Grid because it is a capital-heavy, regulated network operator. Reuters market data show the company had 47.5 billion pounds of total debt at end-2025 and runs electricity and gas networks in Britain and the northeastern United States, leaving investors alert to any jump in funding costs even when revenue is relatively stable. 6
The weakness was not isolated. SSE fell 3.0% on Friday and United Utilities lost 2.2%, while the broader European utilities index dropped 2.7% as investors stepped back from defensive stocks often bought for their steady dividends. 7
Broker caution had already begun creeping in. Jefferies analyst Ahmed Farman downgraded National Grid to hold on Wednesday with a 1,410 pence target, citing the stock’s premium valuation and warning that higher real rates were a headwind for sentiment. 8
Still, the bearish case could change quickly if the energy shock eases. Weekend Reuters reports said Iranian gas exports to Iraq had resumed and Tehran was ready to let Japanese-related vessels transit Hormuz, while Prime Minister Keir Starmer is set to meet senior ministers and Bank of England Governor Andrew Bailey next week on the war’s cost-of-living hit. But if supply disruptions persist and rate bets keep climbing, National Grid’s shares may stay under pressure even after the company’s March outlook upgrade. 9
