Shares in Britain’s housebuilders rose as a smaller-than-expected rise in inflation fuelled hopes of further interest rate cuts this year.
In a boost for millions of borrowers with mortgages, consumer price increases of 2.2 per cent in the year to July was less than the 2.3 per cent pencilled in by economists.
Despite rising for the first time this year, inflation is just above the Bank of England 2 per cent target.
Money markets are betting on further rate cuts this year after the Bank this month trimmed borrowing costs from 5.25 per cent to 5 per cent – the first cut in four years.
Borrowing costs: Housebuilders rallied on hopes that lower rates will feed into cheaper mortgages and boost demand
Housebuilders rallied on hopes that lower rates will feed into cheaper mortgages and boost demand.
Persimmon rose 3.4 per cent, or 54.5p, to 1664.5p, Barratt Developments added 3.8 per cent, or 20.2p, to 549.2p, Berkeley Group gained 3.9 per cent, or 200p, to 5330p, Taylor Wimpey was up 3.6 per cent, or 5.75p, to 163.45p and Vistry climbed 2.6 per cent, or 34p, to 1352p.
There were also gains for Crest Nicholson a day after rival Bellway pulled out of the race to buy the firm. It added 3.3 per cent, or 6.8p, to 215.6p.
The rally helped drive London’s main markets to a fourth consecutive session of gains, with the FTSE 100 up 0.6 per cent, or 45.82 points, to 8281.05 while the FTSE 250 advanced 1 per cent, or 208.21 points, to 20,952.29.
Ladbrokes and Coral owner Entain was one of the top blue-chip risers after activist investor Eminence Capital bought £23million worth of shares.
The US asset manager, which has also targeted Dettol seller Reckitt Benckiser, snapped up more than 4m shares at around 575p each.
Stock Watch – Intelligent Ultrasound
A slump in sales on both sides of the Atlantic has hit Intelligent Ultrasound.
The medical training and software company, based in Cardiff in the UK and Atlanta in the US, saw revenues fall 22 per cent to £4.5million in the first half of 2024.
Squeezed NHS budgets resulted in UK sales tumbling 58 per cent to £800,000 while revenues in North America plunged 23 per cent to £2.2million due to delivery backlog and order delays.
It shares fell by 3.5 per cent, or 0.37p, to 10.25p.
Ricky Sandler, founder and chief executive of Eminence Capital, has sat on the board of Entain since January. The gambling giant added 4.5 per cent, or 26.4p, to 607.8p.
Dowlais chief Liam Butterworth and finance boss Roberto Fioroni bought almost £300,000 worth of shares in the GKN spin-off a day after Dowlais revealed it had been hit by a slump in demand for electric vehicles and may sell its powder metallurgy business. Shares rose 8.4 per cent, or 4.5p, to 636p.
Fund manager Jupiter rose 6.5 per cent, or 5.1p, to 83.2p following a UBS broker upgrade. But first-half profits fell at Balfour Beatty due to higher infrastructure investment costs.
The construction group, which worked on projects with National Grid, BP and Rolls-Royce, rose 2.5 per cent, or 10.2p, to 399.4p.
Fellow mid-cap firm Molten Ventures added 4.9 per cent, or 18p, to 386.5p after the tech investor hit a key milestone. It has gained £124million from selling stakes in firms – beating its target of £100m for the year to March 2025.
Homeware brands owner Ultimate Products was hit by a slump in demand and lower orders. Sales fell 6.5 per cent to £155.5million in the year to the end of July while profits dropped 14 per cent to £14.4million.
Shares sank 1.6 per cent, or 2.25p, to 137.75p.
Ixico, a medical data analytics firm, won a contract worth nearly £2million to work on a trial for patients with Huntington’s disease, lifting it 33.3 per cent, or 2.38p, to 9.5p.
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