The FTSE 100 was weaker on Monday as investors once again felt the pressure of interest rate hikes and UK house price data knocked the FTSE 100’s housebuilders.
The FTSE 100 was down 0.45% to 7,531 at the time of writing.
Another robust US jobs report released on Friday showed average wage growth was still running hot in July suggesting the Federal Reserve will continue to increase interest rates to control inflation. US stocks fell on Friday and Asia started the week in the red as a result.
European shares were set for a weaker start on Monday and the FTSE 100’s decline was exacerbated by downbeat house price data released by Halifax. Halifax said UK house prices had fallen 2.4% in the year to July.
“The big move higher in UK rates continues to have a dampening effect on the UK housing market. Figures from Halifax unsurprisingly showed a fourth straight month of declining prices. With mortgages becoming less affordable it is proving increasingly difficult for people to get a leg up on the property ladder or even join the ladder in the first place,” said AJ Bell investment director Russ Mould.
“Housebuilder Taylor Wimpey was among the top fallers on the FTSE 100 this morning. The sector faces a very different environment today after years of strong property prices, cheap mortgages and state support for first-time buyers.”
UK equity bulls had little to get excited about on Monday with few stocks making convincing gains. Rolls Royce was the top riser, gaining 1%, as the engineering firm continued its monumental rally.