Builders prove drag as FTSE nudges ahead

Market report Scott Reid

Housebuilders dragged on the top flight after investors took a dim view of the Budget pledges to try to turbo-charge the housing market.

The FTSE 100 closed just 7.68 points higher at 7,419.02, as housing giants dominated the biggest fallers on the market, with Barratt Developments sinking more than 3 per cent, or 23.5p, to 610p.

David Madden, analyst at CMC Markets UK, said: “The FTSE 100 is higher on the session in the wake of the Chancellor lowering the growth forecast for the UK over the next few years. The lower revision to UK growth saw the decline in the pound, which helped the FTSE 100 as it is very internally focused.

“Ukhomebuilderssuchas Bellway, Berkeley Group and Barratt Developments are in the red after the Budget revealed a plan to shake up the law in relation to land banks.”

Shares in Royal Bank of Scotland slipped more than 1 per cent as the government dusted off plans to re-privatise the taxpayer-backed lender.

Among the Budget announcements, the government said it plans to restart share sales in RBS by the end of the 2018-19 financial year and sell off £3 billion a year over five years – around two-thirds of its 72 per cent stake. Shares were down 3.7p to 269.5p.

Thomas Cook was among the biggest fallers on the second tier after it revealed a 40 per cent plunge in UK earnings as it suffered amid “challenging” trading and a hit from the weak pound. The holiday firm sank more than 8 per cent, or 10.2p, to 111.5p. The sofa chain has seen orders bounce back after a slump in the second half of its last financial year and assured it was well-positioned in the marketplace. The travel firm revealed a 40 per cent plunge in UK earnings as it suffered amid “challenging” trading and a hit from the weak pound.