UK shares with losses unseen in two months after Osborne, Carney statements

UK shares recorded the largest drop in two months on Friday, as the Chancellor of the Exchequer, George Osborne, promised that Bank of England will be allowed to use new measures in order to curb mortgage lending in the country. In addition, central banks Governor Mark Carney said that a rate hike was possible sooner than anticipated.

UKs benchmark FTSE 100 Index fell 65.26 points, or 0.95% to close at 6,777.85 in London on Friday, which widened the weekly loss to 1.2%. This has been the most considerable daily drop since April 11th. The broader benchmark, FTSE All-Share Index dropped 1.1%.

Shares of Persimmon PLC (PSN:LN), a residential house-building company, marked the largest loss within the FTSE 100, losing 91.000 pence, or 6.99%, to close at 1,211.000 pence on Friday.

Shares of Barratt Developments PLC (BDEV:LN), a company also operating in the property sector, lost 23.300 pence, or 6.30%, to close at 346.300 pence, while shares of Land Securities Group PLC (LAND:LN) slumped 4.37% to close at 1,028.000 pence.

British Land Co PLC (BLND:LN) recorded the fifth largest loss within the FTSE 100, with shares down 4.32%, or 31.000 pence, to close at 686.000 pence.

In the mean time, the biggest gainer was Fresnillo PLC (FRES:LN), a company specialized in silver and gold mining and exploration, as its shares added 1.13%, or 9.000 pence, to close at 807.000 pence on Friday.

During his annual Mansion House speech in the City of London George Osborne committed himself to legislation, which will enable Bank of England to restrain the amount of funds, that individuals can borrow in the form of home loans.

Also taking a statement at Mansion House, BoE Governor Carney said that higher costs of borrowing could prolong over-leveraged households, which may pose a threat to financial stability.

“Carney’s comments are weighing on the property sector in general,” Richard Hunter, head of equities at Hargreaves Lansdown Plc in London, wrote in an e-mail, cited by Bloomberg News. “The share-price moves may have been amplified by generally weaker sentiment.”