LONDON, Jan 29, 2026, 08:58 GMT — Regular session.
- Shares in National Grid (NG.L) dropped 0.7% in early London trading, following a fresh 52-week peak reached just yesterday.
- Rising UK gilt yields are squeezing “bond proxy” utilities as rate speculation heats up ahead of the Bank of England.
- Investors will also keep an eye on National Grid’s RIIO‑T3 regulatory briefing scheduled for Thursday.
National Grid shares dipped Thursday morning, retreating from the one-year peak reached in the last session. The pullback came amid rising UK bond yields, which pressured dividend-heavy utility stocks.
This shift is significant since regulated utilities often trade like bond substitutes. As government borrowing costs climb, their reliable cashflows lose appeal, and for companies that frequently raise debt, financing costs tick up at the edges.
By 0831 GMT, 10-year UK gilt yields hit 4.569%, their highest since Nov. 20, following the U.S. Federal Reserve’s decision to keep rates steady. Fed Chair Jerome Powell called the economic outlook “clearly improving.” Meanwhile, money markets expect the Bank of England to keep rates at 3.75% next week, with just about 33 basis points of cuts priced in for 2026 — a basis point equals one hundredth of a percentage point. 1
National Grid slipped 0.65% to 1,222.5 pence, falling short of its 52-week peak of 1,231 pence reached on Wednesday. The previous session ended with the stock at 1,230.5 pence. 2
The FTSE 100 index gained roughly 0.6% during the session, pushing the defensive utility stock behind in the early trading. 3
Societe Generale, serving as stabilisation coordinator, announced that stabilisation managers might carry out price-support operations for an anticipated 500 million euro securities offering from National Grid Electricity Transmission plc. The post-sale “stabilisation” process aims to steady trading, with the notice specifying it will end by March 5 at the latest. 4
National Grid’s U.S. arm reported operational strains this week linked to storm damage, restoring power to over 8,800 Massachusetts customers after Winter Storm Fern. Chris Laird, COO for electric at National Grid New England, emphasized the challenge: “With sub-freezing temperatures the norm in recent weeks, it is critically important that we deliver for our customers.” 5
Bond yields remain the key driver. Should gilts continue to sell off, utilities could stay under pressure, even without any negative news from individual companies. A swift shift in rate expectations, though, would shift the mood fast.
Regulation continues to be a critical factor for National Grid, as a significant portion of its UK profits depend on returns determined by the regulator. Even minor changes in allowed returns or incentives can have a big impact across a five-year control period.
National Grid will hold a RIIO‑T3 final determination webinar at 10:30 a.m. on Thursday to outline the regulator’s decision and what it means for stakeholders. 6
In the UK, the company plans to reveal its response in early March 2026, following a review of Ofgem’s final determination covering the April 2026 to March 2031 period. 7
