Worries about the outlook for the UK economy in the light of the latest data have push housebuilding shares lower.
The UK economy grew at 0.7% in the third quarter, as expected, although quarterly growth for most quarters from the start of 2013 have been revised downwards.
At the same time the current account deficit has soared from £24.3bn in the second quarter to £27bn or 6% of GDP. That raises the prospect of sterling falling as investors look askance at the state of the country’s financing, which might mean interest rate rises to defend the currency.
So housebuilders, helped for so long by cheap borrowing, have come under a little pressure. Persimmon is down 32p to £15.61, Taylor Wimpey has lost 2.4p to 134.1p and Barratt Developments has fallen 7.7p to 458.2p.
These are the three biggest fallers in a FTSE 100 which is still in positive territory, up 23.32 points at 6600.06.
Among the mid caps Bovis Homes has lost 16.5p to 867p.
Elsewhere Rolls-Royce is down 1.5p at 872p after a downbeat note from Investec. Analyst Rami Myerson said:
The Trent 700, that powers the A330ceo, is currently Rolls’ most significant in production engine. We reduce our forecasts for Trent 700 deliveries to reflect reduced A330 production forecasts from 2015 following disappointing order intake and Airbus’ investor forum. A sharper decline in Trent 700 deliveries will provide further headwinds to Rolls medium term profit growth. We reduce our 2016 and 2017 earnings per share forecasts by 4% and 8% to reflect this and the impact of lower oil prices on Rolls Land & Sea businesses. Hold retained.
