Thames Water - comment

Good News. Seeing Ofwat officially shift from a dogmatic stance to a more pragmatic, goal oriented position signals the very conversion around a common goal that everybody except the media wants to see. It doesn’t mean that investing today will be that much more attractive, but prices won’t have to rise by as much to cover for the penalties, raising the political feasibility of the agreement. We are not great fans of the long-term nature of the deal and the reliance on future governments, but we will update our work in the near term to make sure we are not missing an opportunity.