Week ahead: City eyes cladding bill impact on house builders’ bottom lines
Signs of the negative impact of the government turning to home builders to fix the cladding crisis is likely to draw City traders’ gaze in a week of jam packed corporate and economic announcements.
London’s capital FTSE 100 index dipped 0.78 per cent to 7,521.68 over the last week, while the mid-cap domestically-focused FTSE 250 index, which is more aligned with the health of the UK economy, dropped 0.49 per cent to end the week at 20,881.80 points.
Some of Britain’s biggest house builders update markets this week and are likely to set out their forecasts for the potential impact on their bottom lines from the government asking the sector to partially foot the bill for removing dangerous cladding materials.
Taylor Wimpey posts an update on Tuesday, while Persimmon delivers a trading update the next day.
The continued resilience of the UK’s housing market despite interest rates rising and the cost of living squeezing household finances and confidence in the economy likely lifted housebuilders’ bottom lines.
A higher interest rate environment likely boosted London-listed banks’ profits.
All of Britain’s top high street lenders post first quarter results this week, kicking off with HSBC, which generates a large proportion of its profits in Asia, on Tuesday.
Lloyds, Britain’s biggest mortgage lender, and Barclays post results for the first three months of the year on Wednesday and Thursday respectively.
Now majority privately owned NatWest, formerly RBS, rounds off UK banks’ earnings season on Friday.
None of the lenders are anticipated to announce extra giveaways for shareholders.
The tightening cost of living is weighing on consumer spending, attested by last week’s poor retail sales print, which is likely to hit supermarkets’ performance over this year.
Sainsbury’s senior management are expected to warn of the spending hit over 2022 when the supermarket posts finals on Thursday.
Economists are forecasting a similar hit to UK consumer confidence across the pond when fresh optimism data for America is published on Tuesday.
Britons’ optimism has plunged to its lowest level since the aftermath of the financial crisis and is lower than at any point during the pandemic.