As it happened: FTSE 100 wavers as weak housebuilding drives faster construction downturn

Welcome back to City AM‘s FTSE 100 liveblog.

The UK’s blue chip index made a soft start on Friday morning, as investors brace for a US jobs report and digest the latest signs of a worsening downturn in the UK’s construction sector.

Borrowing costs have eased slightly, after a global rout on government bonds threatened to overshadow Andy Burnham’s first few days of the parliamentary session and prompted calls for urgent action from his former advisors.

The yield on the UK’s 10-year gilt fell further on Friday morning to 5.15 per cent. Pressure on US yields is easing too, after remarks from Federal Reserve Governor Christopher Waller fuelled speculation that the central bank may hold off on hiking interest rates in the near future.

S&P Global’s UK Construction PMI Index fell to 44.3 in August, down from 44.7 in the month before, driven by a sharp downturn in housebuilding activity. The UK’s listed housebuilders have warned on profit and cut completion targets in recent months, as they urge the government to stimulate demand among first-time buyers.

Kelly Boorman, head of construction at audit firm RSM UK, said that “concerns over demand for private residential activity continue to weigh on sentiment”. She added: “Further government initiatives to help boost private residential demand, such as first-time buyer incentives, would therefore be welcome by the sector, and could go a long way to easing some of the pressures faced by housebuilders.”

Oil prices held steady on Friday morning. Brent crude – the international benchmark for oil prices – shed about 0.2 per cent but remained above $95 per barrel. Oil prices are on track to have gained eight per cent this week as investors reacted to a fresh volley of strikes between the US and Iran.

We’ll be bringing you the latest market updates and analysis.

Jump straight to:

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