London, June 18, 2026, 13:13 BST
- National Grid slipped 1.6% to around 1,197 pence, while the FTSE 100 was down about 1%.
- The Bank of England left its policy rate unchanged at 3.75% after a 7-2 vote. Two-year gilt yields moved up to 4.21%.
- The company gave no new earnings outlook. The scrip-dividend election for ordinary shares shuts at 17:00 BST.
National Grid shares dropped 1.6% to 1,197 pence at 12:54 BST Thursday. The stock opened at 1,210 and slipped to a low of 1,192.5. National Grid lagged the FTSE 100, which was off around 1%.
National Grid’s latest regulatory filing was about annual performance-plan awards, not business activity. CEO Zoë Yujnovich got 24,797 shares, while CFO Andy Agg got 16,602 shares, both with retention and clawback clauses. Shares in SSE, another UK utility with a lot of networks, dropped 1.2%, which suggested the move was part of a larger sector reaction to rates, not a rethink of National Grid’s guidance.
Bank of England holds Bank Rate at 3.75%; Greene, Pill push for hike
The Bank of England left Bank Rate unchanged at 3.75%. Two policymakers, Megan Greene and Huw Pill, voted to lift it right away to 4%. Most members argued softer demand and a cooling jobs market would help stop higher energy costs from feeding through to wages and other prices.
National Grid gets lumped in with other regulated utilities as a kind of bond proxy, with investors targeting steady dividends. The two-year gilt yield moved up six basis points to 4.21%. One basis point is equal to one-hundredth of a percentage point. Higher gilt yields tend to make bonds look more attractive next to dividend stocks, and they push up the rates used to discount and finance big infrastructure projects. “The bar for hikes remains high,” said Schroders senior economist George Brown. Reuters
National Grid’s shares Thursday traded almost flat to the 1,197.70-pence scrip reference price. The scrip dividend gives holders the option to take new shares rather than cash. Ordinary shareholders have until 17:00 BST to make their election. The 32.14-pence final dividend is scheduled for July 23.
National Grid remains up about 14.5% in the past year, but shares are trading roughly 16% under the 52-week peak of 1,428.5 pence. That drop points to investors already trimming some of the premium that utilities like National Grid carried when defensive assets were in favor and borrowing costs were lower.
National Grid’s operating environment looks the same as it did in May. The company posted adjusted operating profit of £5.68 billion for the year ending March, coming up short of its own consensus of £5.75 billion, with US storm-repair costs hitting the bottom line. National Grid also logged £636 million in timing under-recoveries—the shortfall between allowed and collected regulated revenue. It kept its target for adjusted EPS growth at 13% to 15% for the financial year.
National Grid is set to pour at least £70 billion into capital projects in the next five years. That follows last year’s record spend of £11.6 billion. The company aims for underlying EPS growth of 8% to 10% a year on average. CEO Yujnovich called it the “largest investment programme in our history”. About 75% of delivery and supply deals are already locked in, and about two-thirds of the planned spending is backed by regulatory deals.
But there isn’t much margin for error. National Grid said it expects finance costs to go up by around £200 million this year, with capital spending heading toward £13 billion. Net debt should climb by just over £6 billion from £44.2 billion. Higher-for-longer rates, any project delays, cost inflation, sluggish regulatory recovery or another severe US storm season all threaten the earnings outlook.
National Grid has its annual meeting set for July 14, with the dividend due nine days after that. The company hasn’t given new operating numbers, so the stock could stay reactive to gilt yields and signs that its bigger capital spending is feeding into regulated revenue as planned.
