Over the past year, UK utility share prices have been volatile, especially within the electricity sub-sector. The combination of the war in Ukraine and the associated impact of fluctuating gas prices, along with sharply higher inflation and the consequential rise in interest rates, have destabilised much of the sector. Indeed, most sector constituents have seen their share pieces fall (although not seriously), while Centrica, the UK’s leading gas company, has bucked the trend, with a near 50% rise over the past year, albeit from a very low base. The two largest quoted water companies have announced their full-year results in recent days (the announcement of Pennon’s full-year results post-dates the compilation of this publication). The results of the two leading water stocks, Severn Trent and United Utilities, contained few surprises; but the latter’s revenues fell by over 2%. The impact of surging inflation has seen a sharp spike in those interest payments associated with index-linked bonds, a funding mechanism to which United Utilities, in particular, is exposed; consequently, its adjusted EPS for 2022/23 was negative.