Interim Management Statement

United Utilities Group PLC

28 January 2009

                 UNITED UTILITIES INTERIM MANAGEMENT STATEMENT                 

United Utilities today issues a trading update for the period from 1 October
2008 to 27 January 2009. Current trading is in line with the group's
expectations.

The regulated water business continues to invest significant sums in improving
the company's infrastructure to provide essential services for customers.
Regulated revenue for the year ending 31 March 2009 is expected to grow at a
similar rate to that outlined in the group's 2008/09 half year results
published on 26 November 2008. United Utilities' balance sheet remains robust
and its asset base is growing in line with management's expectations as the
company progresses through the peak phase of its substantial regulated capital
investment programmes.

The company's business improvement initiatives are progressing well and United
Utilities Water remains broadly on track to deliver its regulatory efficiency
targets across the 2005-10 period, although it continues to face increasing
cost pressures in areas such as power and bad debts.

The group continues to benefit from a robust financing position and has
headroom to cover its projected financing needs until 2011. During the period,
United Utilities Water PLC (A3, stable; A-, stable) drew down a 12 year, £400
million loan from the European Investment Bank. In addition, United Utilities
Water PLC issued a 6.125%, 7-year bond: £250 million in December 2008 and a
further £50 million in January 2009. The Board continues to target an
investment grade credit rating of A3 for United Utilities Water PLC, which it
believes best mirrors regulatory assumptions and is an appropriate investment
grade rating to allow the company to raise finance to fund its substantial
capital investment programmes.

On 26 November 2008, the Board declared an interim dividend of 10.64 pence per
ordinary share, in respect of the six months ended 30 September 2008, in line
with the group's dividend policy.

In December 2008, United Utilities was selected as preferred bidder for a
substantial municipal solid waste treatment contract in Derbyshire, via a joint
venture with Interserve*. This was confirmed by Derbyshire County Council and
Derby City Council on 13 January 2009. The contract is due to commence in April
2010 with an expected duration of 27 years and will include the design, build
and operation of a new waste treatment facility. This represents United
Utilities' first step into the municipal solid waste treatment sector, enabling
the group to utilise its core skills in a new market with significant growth
potential.

Regulatory developments

As part of the 2009 water price review process, on 19 December 2008, Ofwat
published its initial draft baseline position for the 2010-15 period under the
capital expenditure incentive scheme**. This initial draft baseline represents
the first stage of Ofwat's capital expenditure assessment, with a further draft
baseline and final baseline still to be developed. It assumes a lower number of
projects and outputs and a reduced scope of capital maintenance activity,
compared with the proposals included in United Utilities' draft business plan.
In addition, the initial draft baseline does not take account of further
potential projects which, as outlined previously, United Utilities is likely to
include in its final business plan in April 2009. These areas will continue to
form part of the ongoing discussions with the company's regulators.

United Utilities is currently reviewing this initial draft baseline position as
part of the overall price review process. The company intends to propose a
level of capital expenditure in its final business plan in April 2009 which it
believes represents an appropriate balance to safeguard existing standards of
service, address new, higher quality standards and make provision for the
challenge of climate change, whilst maintaining the affordability of customer
bills.

Outlook

Looking ahead, management is confident of delivering a good underlying
financial performance for the year ending 31 March 2009.

In line with its usual practice, United Utilities intends to issue a pre-close
trading update on 26 March 2009.

United Utilities' contacts

For further information please contact:

Philip Green, Chief Executive                        [phone]     
                                                                             
Tim Weller, Chief Financial Officer                  [phone]     
                                                                             
Gaynor Kenyon, Communications Director               [phone]     
                                                                             
Darren Jameson, Head of Investor Relations           [phone]     
                                                                             
Dominic Fry / Tom Murray, Tulchan Communications     [phone]    

Notes

* Interserve is a services, maintenance and building group operating in the
public and private sectors in the UK and internationally.

** Further information on the capital expenditure incentive scheme (also
referred to as `menu regulation') is available in Ofwat's "Setting price limits
for 2010-15:  Framework and approach - a consultation paper".