Barratt update forms foundation of Wednesday’s diary, UK inflation data eyed


The mid-point of the week will be a relatively quiet affair compared to the upcoming busy Thursday, however, a trading update from housebuilder Barratt is likely to draw the eye of some traders.

Meanwhile, UK inflation data will be closely watched following Tuesday’s higher than expected US figure.

The UK CPI mark was 2.1% last time, the first time the figure had come in above the Bank of England‘s 2% target since November 2018. With US inflation beating forecasts, there will be fears the UK economy could follow suit.

Barratt builds on favourable housing market

A trading update from Barratt Developments PLC (LON:BDEV) on Wednesday is likely to be an upbeat affair, given the extremely favourable tailwinds enjoyed by the house building sector.

The update is expected to provide insight into completions, pricing, reservations and the order book, as well as the land bank and net cash position.

“Analysts and shareholders will doubtless be looking for upbeat commentary, especially given ongoing Government support for the market, via Help-to-Buy and 95% loan-to-value mortgage guarantees, the ongoing shortage of supply relative to demand and an apparent shift toward bigger housing, as those who can afford to do so look for properties that are better suited to working from home,” observed AJ Bell’s Russ Mould.

“Barratt continues to generate copious amounts of cash and return much of it to shareholders (perhaps raising questions about whether Government programmes for housing are swiftly passing straight through to financial investors),” Mould suggested.

Others would say there is no “perhaps” about the transfer of taxpayers’ money to the bottom line of housebuilders.

The stamp duty holiday boost is soon to be withdrawn but “Help to Buy” is still with us, doing the opposite of what it is meant to do by driving up property prices, and the only fly in the ointment seems to be rising raw material prices.

Significant announcements for Wednesday July 14:

Trading announcements: Barratt Developments PLC (LON:BDEV), Dunelm Group plc (LON:DNLM), Ashmore Group PLC (LON:ASHM), Tullow Oil PLC (LON:TLW)

Finals: Accrol Group Holdings PLC (LON:ACRL), Great Eastern Energy Corp Ltd (LON:GEEC), Knights Group Holdings PLC (LON:KGH), Kromek Group PLC (LON:KMK), System1 Group PLC (LON:SYS1)

Economic data: UK inflation, US PPI


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