Labour win spells more regulatory clarity for UK utilities, JPM says

British Utilities Post-Election:

• British utilities are expected to benefit from increased investment and regulatory clarity after the Labour Party's victory in the parliamentary election.
• FTSE utilities index rose by 0.6% with gains led by Centrica and Drax.
• Analysts believe most downside risks have been priced in post-election fears of tougher regulations.
• Labour Party's government may support Drax Power Station, especially concerning security of supply.
• Centrica may see more buybacks due to improved visibility on capital allocation.

Policy Outlook for UK Utilities:

• Policy differences under the new regime may be narrow, with a potentially supportive framework for faster grid investments.
• Analysts anticipate a generally more expansive and interventionist policy approach that could benefit UK utilities.
• Water firms await upcoming regulatory determination on July 11, expected to solidify sector growth story.
• More investment is needed in water firms for environmental performance improvement.
• Ofwat postponed the consultation on price review 2024 due to the elections, now scheduled for next week.