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U.K. builders slumped Monday after the government said it was seeking £4 billion from the industry to deal with unsafe cladding.
Builders including Persimmon
PSN,
Berkeley Group
BKG,
and Taylor Wimpey
TW,
each fell as Secretary of State for Levelling Up, Housing and Communities Michael Gove gave builders a deadline of early March to agree a “fully funded plan of action” including remediating unsafe cladding on 11-to-18 meter buildings.
Cladding concerns have weighed on the sector since the 2017 fire at Grenfell Towers in London that led to 72 deaths.
Analysts at UBS say a worst-case scenario would be a tax increase that would reduce sector earnings per share by 11%, but a likely outcome is “some sort of burden sharing.”
The FTSE 100
UKX,
slipped 0.1%, with the U.K. index outperforming European rivals that have a greater technology weighting.
Hopes for rising bond yields lifted the U.K. financial sector, as Barclays
BARC,
and HSBC Holdings
HSBA,
each rose 2%.
