This could further strengthen the appeal of defensive firms that are less affected by the economic outlook. Utility companies could be viewed as a safe haven during periods of extreme stock market volatility.

United Utilities is also attractive from an income perspective. Its yield of 4pc beats the FTSE 100’s 3.2pc and the company aims to increase its dividends at the same rate as the “CPIH” version of the consumer prices index including owner occupiers’ housing costs (CPIH). This is the Office for National Statistics’ preferred inflation measure and currently stands at 5.5pc.

Of course, United Utilities should not be viewed as a risk-free investment. Higher inflation has already caused the amount of interest it pays on its index-linked debt to rise. 

Furthermore, its limited reliance on the economy’s performance means that investors do not stand to benefit from an improving long-term economic outlook. This could mean it does not pique the interest of investors with a higher risk appetite.

Since this column advised readers to avoid the stock in November 2020, it has risen roughly in line with the FTSE 100 to post a gain of 18.6pc. 

Now, though, its defensive characteristics and relative capacity to overcome a period of sustained high inflation make it a far more relevant investment in an uncertain geopolitical and economic environment.

In Questor’s view, the stock market’s recent performance underplays the risks that currently face investors. Adopting a prudent stance that includes holding relatively stable firms such as United Utilities could be a sensible response that pays off over the long run.

Questor says: buy

Ticker: UU

Share price at close: £10.89

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