By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- Stocks in London tilted higher Friday,
with home builders lifted after upbeat analyst comments about the
sector.
The FTSE 100 index rose 0.2% to 6,746.88, but it was on track
for a weekly decline of 1.2%.
Friday's advance was headed up by a 3.4% rise in home builder
Barratt Developments PLC and a 1.4% gain for Persimmon PLC after
UBS retained its positive view on the home-construction sector
despite policy concerns.
Housing stocks bumped higher Thursday after the Bank of England
outlined measures aimed at cooling the U.K.'s housing boom. The
"recommendations to limit high loan-to-income lending and impose
more stringent affordability stress-testing was a sensible, but
relatively mild initial step to curb potential future excesses in
the housing market," said UBS analysts.
But an improving U.K. economy, historically low costs of
mortgage financing and political support for new construction are
still in the housing sector's favor, they said.
Off the benchmark, housing developer Taylor Wimpey PLC rose
2.3%.
Also gaining was Rolls-Royce Holdings PLC . The shares picked up
1.5% after a Reuters report that Airbus Group is near a decision to
upgrade its A330 aircraft with engines made by Rolls-Royce.
Shares of Barclays PLC were up 1.3% after dropping 6.5% Thursday
to a 19-month low on U.S. legal problems. Reports said Barclays
Chief Executive Antony Jenkins said in a staff memo Thursday that
the bank will conduct an internal probe, following accusations of
dark-pool fraud in a lawsuit filed by the New York Attorney
General.
U.K. stocks on Friday held to gains after the Office of National
Statistics kept its estimate of first-quarter growth in gross
domestic product at 0.8%, meeting expectations for the
quarter-over-quarter figure. Growth on an annualized basis was
reduced to 3% from 3.1%.
The pound (GBPUSD) briefly dipped following the report, but
stayed around the $1.70 level. It was buying $1.702 per dollar,
compared with $1.6983 late Wednesday.
On Friday, Bank of England Governor Mark Carney told the BBC
that returning to "old normal" level of interest rates of 5%
appeared unlikely in the medium term, as economic growth still
faces challenges including higher levels of household debt. He
suggested that rates would be around 2.5% by 2017.
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