Sector movers: Housing stocks hit by rate-hike speculation as inflation rises

15th Jul 2014 14:18

Concerns about a sooner-than-expected rise in interest rates pushed stocks in the housing sector lower in London on Tuesday with investors concerned about how future policy tightening will affect the demand for mortgages.Housebuilders and construction companies slipped after it was revealed that UK consumer-price inflation had jumped to an annual rate of 1.9% in June, up from 1.5% in May and just below the Bank of England's (BoE) target of 2%. Analysts had expected a small pick-up to 1.6%.Economist David Tinsley from BNP Paribas said: "Overall, some of this upward surprise may be the usual noise from timing and seasonal issues. But it's hard not to conclude that this looks like a good old fashioned UK inflation shock. If it persists in coming months it can only intensify the debate on the Monetary Policy Committee."Meanwhile, BoE Governor Mark Carney appeared before lawmakers this morning to discuss last month's half-yearly Financial Stability report as he highlighted concerns with the UK housing market.However, on the subject of rate hikes, he said the rate cycle "will be driven by the data [...]. We were concerned that markets were not reacting to data, a fairly long run of data, that was as good as expected, if not slightly better".Barratt Developments, Persimmon, Taylor Wimpey, Redrow and Crest Nicholson were all registering losses this afternoon.Estate agent chains Foxtons and Countrywide were also unwanted, along with heating and plumbing products group Wolseley.Top performing sectors so far todayMobile Telecommunications 4,406.42 +1.18%Mining 17,506.10 +0.95%Industrial Metals & Mining 1,237.95 +0.87%Fixed Line Telecommunications 4,447.09 +0.81%Gas, Water & Multiutilities 5,973.80 +0.69%Bottom performing sectors so far todayPersonal Goods 22,640.83 -0.98%Household Goods & Home Construction 11,418.00 -0.89%Technology Hardware & Equipment 1,022.04 -0.73%Food & Drug Retailers 3,641.96 -0.72%Food Producers & Processors 7,715.52 -0.70%BC