Interim Management Statement

National Grid PLC
31 January 2008


                                National Grid plc

                          Interim Management Statement
                for the period 1 October 2007 to 30 January 2008


HIGHLIGHTS

   • 15% recommended dividend increase for 2007/08 and 8% annual increases
     targeted through to 31 March 2012
   • £1,326m of value returned to shareholders through the share buy-back
     programme
   • Financial performance in line with our expectations


DIVIDEND POLICY UPDATE

National Grid is today announcing an updated dividend policy, which reflects the
Board's confidence in the Group's growth prospects. The current dividend policy
is to increase dividends per ordinary share by 7% per annum until 31 March 2008.

The Board intends to recommend a new policy with the following two components:
   • for the current financial year a one-off increase of 15% over last year's
     full year dividend; and
   • thereafter a targeted increase of 8% per annum from this enhanced base
     until 31 March 2012.

This will result in a recommended final dividend for the year ending 31 March
2008 of 21.3 pence per ordinary share and a full year dividend of 33 pence.

This policy represents a balance between an initial increase and a significant
sustainable growth commitment which is supported by earnings.


REVIEW OF THE PERIOD

National Grid continues to deliver on its strategy of focusing on electricity
and gas markets in the UK and the US - and implementing its global operating
model.

In December, we accepted Ofgem's final proposals for the UK Gas Distribution
Price Control Review, for the five years to March 2013. The proposals provide
for a significant increase in investment in our gas distribution networks in the
UK that is expected to grow our asset base by almost 25% over the price control
period. Additionally, in our two downstate New York gas distribution utilities
(formerly part of KeySpan), new rate plans became effective on 1 January.

In our upstate New York electricity business we have implemented the third reset
of the 'deferral account', with approval from the New York Public Service
Commission (NYPSC) to recover $124m during calendar year 2008 and $124m during
calendar year 2009. During the period we also filed with the NYPSC our $1.47bn
five year investment programme for our New York electric transmission and
distribution system and, under the terms of our existing rate plan, we also
filed a petition for a special rate recovery mechanism for major incremental
electric transmission and distribution investment that is in excess of the
current rate plan assumptions.

In October, we announced our intention to pursue the sale of Ravenswood, our
2.5GW generation plant in New York City. Sale of the plant is a condition of the
NYPSC order approving the acquisition of KeySpan. The sale process, which is
being conducted through a competitive auction, is well underway.


FINANCIAL UPDATE

National Grid's financial performance is in line with its expectations.

During the period, there have been no events that have resulted in any material
changes to our expectations for the full year. Both cash flow and capital
expenditure remain in line with our plans. Our financial position remains
strong, with around 70% of our net debt either at fixed rates or index linked
for the long term and virtually all other debt fixed up to 31 March 2008.

Under our share buy-back programme we have, to date, repurchased 175.6m shares
at a cost of £1,326m. This leaves around £600m remaining to be returned. This
keeps us on track with our buyback programme comprising £1.8bn from the sale of
our Wireless business, and the return of around £150m of US stranded asset
post-tax cash flows for 2007/08.


CONTACTS

Investors
David Rees         [phone]     [phone] (m)
George Laskaris    [phone]         [phone] (m)
Richard Smith      [phone]     [phone] (m)

Media
Clive Hawkins      [phone]     [phone] (m)

Brunswick
Paul Scott         [phone]     [phone] (m)


CAUTIONARY STATEMENT

This announcement contains certain statements that are neither reported
financial results nor other historical information. These statements are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. These statements include information with respect to National Grid's
financial condition, National Grid's results of operations and businesses,
strategy, plans and objectives. Words such as 'anticipates', 'expects',
'intends', 'plans', 'believes', 'seeks', 'estimates', 'may', 'will', 'continue',
'project' and similar expressions, as well as statements in the future tense,
identify forward-looking statements. These forward-looking statements are not
guarantees of National Grid's future performance and are subject to assumptions,
risks and uncertainties that could cause actual future results to differ
materially from those expressed in or implied by such forward-looking
statements. Many of these assumptions, risks and uncertainties relate to factors
that are beyond National Grid's ability to control or estimate precisely, such
as delays in obtaining, or adverse conditions contained in, regulatory approvals
and contractual consents, unseasonable weather affecting the demand for
electricity and gas, competition and industry restructuring, changes in economic
conditions, currency fluctuations, changes in interest and tax rates, changes in
energy market prices, changes in historical weather patterns, changes in laws,
regulations or regulatory policies, developments in legal or public policy
doctrines, the impact of changes to accounting standards and technological
developments. Other factors that could cause actual results to differ materially
from those described in this announcement include the ability to integrate the
businesses relating to announced or recently completed acquisitions with
National Grid's existing business to realise the expected synergies from such
integration, the availability of new acquisition opportunities and the timing
and success of future acquisition opportunities, the timing and success or other
impact of the sales of National Grid's non-core businesses, the failure for any
reason to achieve reductions in costs or to achieve operational efficiencies,
the failure to retain key management, the behaviour of UK electricity market
participants on system balancing, the timing of amendments in prices to shippers
in the UK gas market, the performance of National Grid's pension schemes and the
regulatory treatment of pension costs, and any adverse consequences arising from
outages on or otherwise affecting energy networks, including gas pipelines owned
or operated by National Grid. For a more detailed description of some of these
assumptions, risks and uncertainties, together with any other risk factors,
please see National Grid's filings with and submissions to the US Securities and
Exchange Commission (the 'SEC') (and in particular the 'Risk Factors' and
'Operating and Financial Review' sections in its most recent Annual Report on
Form 20-F). Except as may be required by law or regulation, National Grid
undertakes no obligation to update any of its forward-looking statements. The
effects of these factors are difficult to predict. New factors emerge from time
to time and National Grid cannot assess the potential impact of any such factor
on its activities or the extent to which any factor, or combination of factors,
may cause results to differ materially from those contained in any
forward-looking statement.




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