BUZZ-UK homebuilders gain as sharp fall in inflation spurs rate cut hopes

Reuters01-15
BUZZ-UK homebuilders gain as sharp fall in inflation spurs rate cut hopes

** Index of UK housebuilders .FTNMX402020 rises 3.4% after data shows unexpected slowdown in British inflation in December and a sharper decline in core measures of price growth

** Inflation eases to 2.5% in December from 2.6% in November; core inflation falls to 3.2% from 3.5%

** The Bank of England - which will announce its interest rate decision on Feb. 6 - forecast in early November that inflation would be 2.5% in December

** "For now, this slightly softer report should help reassure investors that the BoE can continue with its gradual easing cycle, and we expect the next rate cut in February" - Luke Bartholomew, deputy chief economist, abrdn

** BoE rate cuts filter down to lower mortgage rates, boosting demand for homes

** FTSE 100 homebuilders Barratt Redrow BTRW.L, Berkeley BKGH.L, Persimmon PSN.L, Taylor Wimpey TW.L and Vistry VTYV.L gain between 3% and 5.3%

** Midcap builders Bellway BWY.L and Crest Nicholson CRST.L up 4.4% and 3.2%, respectively

(Reporting by Aby Jose Koilparambil in Bengaluru)

((abyjose.koilparambil@thomsonreuters.com))

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