UK housebuilders fall on surprise CPI rise, Ibstock shares falls on guidance

(Partial Video Transcript)

Housebuilders in the crosshairs again

Let's take a look at Persimmon and Crest Nicholson first, because Persimmon is down 4.5%. And Crest Nicholson, which we covered earlier on in the week as well, is lower, mirroring the broader sector, down 3.6%. What's really happened is that real estate firms, property companies are falling in terms of their share price after Britain's annual rate of consumer price inflation (CPI) surprisingly rose for the first time in ten months in December. And this is increasing the expectations that there won't be rate cuts any time soon, especially if inflation starts to come back in a big way and remains uncomfortably high for many central banks. Not just the UK, but the US is seeing the same thing too.

Here in the UK, let's have a look at Barratt Developments as well to see if is a reaction there. And there is - Barratt is currently down more than 3%, and I predict it will be a similar picture that Taylor Wimpey as well, because with these housebuilders, if one's down, normally the others are too, down 2.7%.

Subsequent impact on Ibstock

What's also interesting is it's also the ancillary or related industries that are also being affected. Let's take a look at Ibstock for you. This is the brick and concrete maker. It is currently down more than 3%, as you can see there, 3.2%. Among the top percentage losers on the FTSE mid-cap index. The company says it sees 2023 revenues down by 21% to around £405 million. And it's also just completed a review in Q4 to cut headcount.