Housing boosts FTSE gains

Housebuilding and retail shares jumped today amid growing signs that the Bank of England will cut interest rates tomorrow.

Poor house price and consumer confidence figures suggested the Bank may be prompted to lower rates from 5.75%, offering a much-needed boost to the UK’s faltering economy.

The FTSE 100 Index rose 80.8 points to 6396 by mid-morning, with housebuilders the biggest risers despite the Halifax reporting a 1.1% fall in house prices during November.

Taylor Wimpey led the risers board with a gain of 8.3p to 195.8p, while Charles Church owner Persimmon lifted 31p to 790.5p, a gain of 4%. Barratt Developments was 14.75p higher at 456p.

In the retail sector, B&Q owner Kingfisher rose 4.1p to 155.3p, with Currys business DSG International not far behind, ahead 2.9p at 111.8p. Next lifted 43p to 1750p and Marks & Spencer also cheered 10p to 593p.

Banking shares also recovered after their battering in the previous session. Royal Bank of Scotland set the pace with a gain of 10.25p to 449.5p, HSBC lifted 18p to 824p and Halifax Bank of Scotland rose 11p to 783p.

But mortgage bank Northern Rock continued its share decline, down another 3%, or 2.8p to 100.2p after a newspaper said the Government had begun drafting a nationalisation bill for the beleaguered firm.

Standard Chartered also dropped 4p to 1843p, despite reassuring over profit forecasts amid the volatility seen in markets.

In the second tier, computer game firm Game Group shot up 15%, or 27.5p to 208p, after the Competition Commission provisionally cleared its recent acquisition of rival Gamestation.

Meanwhile, transport group Stagecoach achieved a gain of 5% after it posted half-year results at the top end of market expectations. Shares were 12p higher at 241p.