US interest rate rise: Which stocks in UK can get affected?

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US interest rate rise: Which stocks in UK can get affected?

Which stocks in UK can get affected by Inflation Data
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Highlights

  • Rising inflation is a trend being observed across the globe. 
  • Investors are concerned about the US Federal Reserve potentially pushing up interest rates to counter the rising inflation.
  • The FTSE100 index fell by 40 points, or 0.5%, closing at 7,445.25 on Monday.

Rising inflation has become a global trend with most economies struggling with the consequences. The inflation levels have been rising in the US as well and it is being anticipated that the US Federal Reserve will raise the interest rates to counter the impact of inflation. This news of potential rise in interest rates has impacted most vulnerable markets worldwide, and the IMF has warned that the vulnerable countries would face the risk of tumbling financial markets. On 10 January, global markets plunged as the investors became concerned about the US rate hike.  

This comes amid the global financial markets already struggling due to sluggish economic growth accompanied by the new Omicron variant of coronavirus. The UK inflation levels are expected to touch 6% this spring, while the economy is dealing with soaring energy bills and labour shortages, and supply chain bottlenecks.  

The FTSE100 index fell by 40 points, or 0.5%, closing at 7,445.25 on Monday. However, it stood at 7,494.20, up by 0.64%, at around  noon on Tuesday, 11 January 2022. With the UK Government announcing a £4-billion package pushing developers to help out in the elimination of hazardous cladding from buildings in the wake of 2017’s Grenfell Tower disaster, the UK housebuilders faced the biggest fall in London. Persimmon and Barratt shares witnessed a 5% fall while Taylor Wimpey and Berkeley went down by 3.5%.  

Let’s take a look at the above-mentioned UK stocks which have been impacted due to the news. 

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US Federal Reserve to raise interest rates to counter inflation

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Persimmon plc (LON: PSN) 

The market cap of the UK-based housebuilding firm Persimmon plc stood at £8,458.97 million as of 11 January and it has provided a negative return of -7.00% to its shareholders in the last one year. Persimmon plc is a constituent of the FTSE100 index, and its shares were trading at GBX 2,670.00, up by 0.76%, at 1:19 PM (GMT) on 11 January 2022. 

Barratt Developments plc (LON: BDEV)

The market cap of one of the UK’s largest residential property development businesses, Barratt Developments plc, stands at £7,153.66 million and it has provided a negative return of -2.39% to its shareholders in the last one year as of 11 January 2022. Barratt Developments plc is a constituent of the FTSE100 index, and its shares were trading at GBX 702.80, up by 0.46%, at 1:28 PM (GMT) on 11 January 2022. 

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Taylor Wimpey plc (LON: TW)

The market cap of the UK residential developer, Taylor Wimpey plc, stands at £6,091.32 million and it has provided a negative return of -0.09% to its shareholders in the last one year as of 11 January 2022. Taylor Wimpey plc is a constituent of the FTSE100 index, and its shares were trading at GBX 169.20, up by 1.35%, at 1:32 PM (GMT) on 11 January 2022.

Berkeley Group Holdings plc (LON: BKG)  

The market cap of the British housebuilder Berkeley Group Holdings plc stands at £5,144.39 million and it has provided a negative return of -2.79% to its shareholders in the last one year as of 11 January 2022. Berkeley Group Holdings plc is a constituent of the FTSE100 index, and its shares were trading at GBX 4,605.00, up by 0.33%, at 1:36 PM (GMT) on 11 January 2022. 

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