Housebuilders buoyed by rate-rise ‘scepticism’

By the Editorial Team · Thursday, October 15, 2026

The Bank of England’s chief economist expressed doubt about multiple interest rate hikes in 2024, boosting the residential property sector and driving gains in major housebuilders like Barratt Redwood and Bellway. This more cautious outlook, alongside the government’s Your First Home scheme, contributed to the FTSE 100 reaching its highest close since September, despite geopolitical tensions and falling gold prices.

Housebuilders received a boost following remarks from the Bank of England’s chief economist casting doubt on expectations of multiple interest rate hikes over the next year. Huw Pill, who has consistently supported raising borrowing costs in 2024, expressed scepticism about market forecasts anticipating rates climbing four times to reach 4.75 percent within the coming 12 months. This tempered outlook, combined with the UK government’s proposed Your First Home scheme designed to assist buyers with a minimum 2.5 percent deposit and a 20 percent state-backed equity loan, helped drive gains across the residential property sector.

Leading the FTSE 100 was Barratt Redwood, Britain’s largest housebuilder, which rose 4 percent to 304¼ pence. On the FTSE 250, Bellway advanced 4.6 percent to 204.6 pence, while Taylor Wimpey increased 3.2 percent to 75½ pence. The broader property sector also saw improved investor sentiment, with office and retail developers Land Securities and British Land rising by 2.7 percent and 2.2 percent, respectively.

These sectoral gains contributed to a positive session for UK equity markets. The FTSE 100 closed up 74.53 points at 10,724.86, marking its highest closing level since September 21. The FTSE 250 also posted a modest increase, climbing 21.58 points to 24,360.77.

The market response came despite ongoing geopolitical tensions in the Middle East, which typically boost demand for traditional safe-haven assets such as gold. Contrary to expectations, gold prices fell 1.8 percent to $4,103.70 per ounce, exerting downward pressure on precious metals miners. Fresnillo experienced a notable decline of 4.6 percent to £25.90, while Endeavour Mining dropped 3.4 percent to £39.91.

Elsewhere, technology stocks saw advances, with Cambridge-based mini-computer manufacturer Raspberry Pi rising 3 percent to 630½ pence. The company has delivered strong financial results this year, driven in large part by the growth of artificial intelligence, with its shares up more than 110 percent since January.

In contrast, Keller Group faced a setback as shares fell 5.3 percent to £30.92. The engineering firm underperformed after failing to provide a fresh earnings upgrade during its capital markets day, disappointing investors.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.