UK REGULATED UTILITIES: UK Utilities have been weak performers: Share prices are c20% off 52-week highs. And the annualised total return since Brexit is negative c2-5% for all stocks. With our expectation of a BoE rate rise to c0.5%, from c0.25% (click here) and increasing political risk (click here) we look at the evidence to see which risks are priced-in. The balance of evidence suggests recent underperformance of regulated utilities may be due to some political risk being priced-in to the shares: 1) UK utilities have traded in-line with long-dated index-linked gilts (>15yrs); yet. 2) UK regulated utilities have underperformed c15% YTD vs. US regulated peers. 3)The pick-up in RPI inflation suggests that share prices should be much higher.