I have £1,890 to invest! Should I buy these FTSE 100 value shares?

I have about £1,890 sitting in a Stocks and Shares ISA I’m looking to invest. I have been looking for the best value shares to buy and this is a popular choice FTSE 100 has caught my attention.

Both trade on price-to-earnings (P/E) and/or price-to-earnings growth (PEG) ratios. But are they buying at current prices or are they just investment traps?

Barclays

Higher interest rates have supported high bank share prices as well Barclays (LSE:BARC). A rate hike by the Bank of England (BoE) has boosted the sector’s profits by increasing the rates banks offer to borrowers and savers.

Markets expect policymakers to continue raising the benchmark in the coming months. Consensus suggests another 0.25% to 0.5% increase from the current level of 4%. This is a good sign for Barclays et al.

But the news coming from the BoE suggests that UK banks and investors may be disappointed. You see, weak economic conditions mean rate setters may be reluctant to raise rates and keep them high for longer.

BoE deputy governor Huw Pill recently told Times Radio that the institution should be careful not to do “too much.”

And after the latest rate hike last week, Bank official Silvana Tenreyro told lawmakers that “current rates are too high.” He even speculated that cuts could come down the line.

Investing in banks is a risky business during an economic crisis. Bad loans may be out of control (Barclays has set aside £722m to cover credit impairment, more than half of which was recognized in the third quarter). And signs from important people that interest rates can be lower than the market expects add another extra layer of risk I’m not comfortable with.

So I would leave Barclays shares on the shelf even though the P/E ratio is low at 5.7 times for 2022.

International Consolidated Airlines Group

The cost of living crisis makes it difficult to assess how strong demand for airline tickets will be this year. Expensive discretionary items like the holidays are the first to fall when consumers feel the pinch. Business travel also tends to decrease during difficult economic periods.

But despite these pressures, the travel sector continues to go from strength to strength. This shows that International Consolidated Airlines Group (LSE:IAG) could be a wise investment for me.

The latest passenger data from Heathrow – a key hub for owner British Airways – showed 5.4 million passengers passed through the airport in January. This is the highest level since the Covid-19 crisis began two years ago.

Interestingly, IAG’s share price is trading at a PEG ratio of just 0.1. So buying a business won’t break the bank for me.

But the company’s huge net debt (which was north of €11bn in September) continues SAP’s appetite for shares. It leaves a question mark about future dividend rates. You can also make the business need to raise cash if trading conditions become difficult again.

I am also worried about the thin margins that IAG is operating on. The ability to increase this by hiking ticket prices is limited because the market is highly competitive. And the problem becomes worse in a period of high inflation like now. I think buying other value stocks can be a better way to get solid returns.