London close: FTSE gains as housebuilders, Barclays rally
By Michele Maatouk
Date: Wednesday 22 Oct 2025
(Sharecast News) - London stocks ended firmly in the black on Wednesday as the latest UK inflation reading raised rate cut expectations, underpinned by solid performances from housebuilders and Barclays.
The FTSE 100 closed up 0.9% at 9,515.00.
Figures released earlier by the Office for National Statistics showed the rate of inflation was unchanged in September, after a jump in airfares was offset by lower prices elsewhere.
The cost of food and drink also fell for the first time since May 2024.
The consumer prices index rose by 3.8% in the 12 months to September 2025, unchanged on August.
The rate remains above the Bank of England's long-term target of 2%. However, it was also better than expected, with most analysts forecasting an increase to 4%.
Core inflation, which strips out the most volatile elements of energy, food, alcohol and tobacco, rose 3.5%, down from August's 3.6%.
Grant Fitzner, chief economist at the ONS, said: "The largest upward drivers came from petrol prices and airfares, where the fall in prices eased in comparison to last year.
"These were offset by lower prices for a range of recreational and cultural purchase, including live events. The cost of food and non-alcoholic drinks also fell."
Food and non-alcoholic drink prices, which have soared in recent months, rose by 4.5%, down on August's 5.1% spike.
The print will provide some relief for chancellor Rachel Reeves, who is due to present her Budget next month.
Patrick Munnelly at Tickmill Group said the inflation print has sparked speculation of a rate cut before the year ends.
"Market sentiment suggests a roughly 75% chance that the BoE's Monetary Policy Committee will lower the bank rate to 3.75% from 4% at its December meeting - a notable jump from the 46% probability estimated prior to the fresh data," he said.
"The unexpected inflation reprieve offers a glimmer of hope for finance minister Rachel Reeves as she prepares for November's budget announcement. Both Reeves and BoE policymakers have been grappling with stubborn inflation and sluggish economic growth, making this development a welcome breather."
In equity markets, housebuilders Persimmon, Barratt Redrow and Berkeley all rose, boosted by raised rate cut expectations.
Clay brick and concrete product manufacturer Ibstock, builders' merchant Travis Perkins and Howden Joinery, a supplier of kitchens and joinery products, also gained.
Chris Beauchamp, chief market analyst at IG, said: "Persimmon and Howdens have topped the leaderboard on hopes that homeowners might feel more tempted to splash the cash on renovations and moving home."
Barclays jumped as it launched an unexpected £500m share buyback, lifted its return on equity target and unveiled a plan to move to quarterly share buyback announcements.
The bank posted a 7% fall in third quarter profit to £2bn, partly due to a higher £235m provision relating to the UK motor finance scandal, taking the total impairment to £325m.
Russ Mould, investment director at AJ Bell, said: "If investors were looking for some reassurance after a tricky little spell for the banking sector then Barclays has provided it.
"Barclays was caught up in market concerns about the US private credit situation last week, with the company having some direct exposure to the collapse of sub-prime auto lender and car retailer Tricolor. It also has the broadest US exposure among its London-listed peers.
"However, the scale of the share buyback announcement unveiled today does not smack of a business in panic mode, nor does an increase in the guidance for the full year. A decision to move to quarterly buyback announcements is an interesting one and could mean shareholders come to expect a return of capital in this way on a regular basis.
"Barclays is undergoing a review of its loan portfolio, and the market may remain wary for some time until it has confidence that there are no more skeletons in the closet.
"Ultimately, this was a decent start to the banking sector earnings season in the UK as the industry tries to rebuild investor confidence."
Softcat advanced as it reported a jump in full-year profit and revenue, pointing to a strong performance in the base business.
Cconsumer goods giant Reckitt was flat as it reiterated its full-year guidance as it reported a "strong" third-quarter performance, with like-for-like net revenue up 7% in the three months ended 30 September at £3.61bn.
ITV tanked after its largest shareholder, Liberty Global, sold half its stake in the broadcaster in a placing, raising about £135m.
Market Movers
FTSE 100 (UKX) 9,515.00 0.93%
FTSE 250 (MCX) 22,229.79 1.47%
techMARK (TASX) 5,588.93 1.06%
FTSE 100 - Risers
Persimmon (PSN) 1,253.00p 6.28%
Barratt Redrow (BTRW) 405.90p 5.05%
Barclays (BARC) 382.00p 4.87%
Entain (ENT) 824.00p 4.81%
SEGRO (SGRO) 720.60p 4.16%
Berkeley Group Holdings (The) (BKG) 4,180.00p 3.83%
DCC (CDI) (DCC) 4,894.00p 3.47%
InterContinental Hotels Group (IHG) 9,336.00p 3.41%
Whitbread (WTB) 3,154.00p 3.17%
WPP (WPP) 367.00p 3.03%
FTSE 100 - Fallers
Rolls-Royce Holdings (RR.) 1,102.50p -2.82%
Fresnillo (FRES) 2,080.00p -1.61%
Melrose Industries (MRO) 625.20p -1.39%
Glencore (GLEN) 340.20p -1.22%
Burberry Group (BRBY) 1,242.00p -1.15%
Scottish Mortgage Inv Trust (SMT) 1,119.50p -0.97%
Coca-Cola HBC AG (CDI) (CCH) 3,482.00p -0.68%
Weir Group (WEIR) 2,856.00p -0.63%
Airtel Africa (AAF) 226.40p -0.44%
Anglo American (AAL) 2,815.00p -0.39%
FTSE 250 - Risers
Ibstock (IBST) 137.20p 7.52%
NCC Group (NCC) 156.00p 7.14%
Travis Perkins (TPK) 649.50p 6.91%
Playtech (PTEC) 284.00p 6.57%
Marshalls (MSLH) 174.60p 6.46%
Genuit Group (GEN) 379.00p 5.87%
Howden Joinery Group (HWDN) 859.50p 5.78%
Grafton Group Ut (CDI) (GFTU) 955.50p 5.38%
Bellway (BWY) 2,716.00p 5.03%
Pantheon Infrastructure (PINT) 109.00p 4.81%
FTSE 250 - Fallers
ITV (ITV) 68.15p -8.58%
Hochschild Mining (HOC) 348.40p -3.81%
W.A.G Payment Solutions (EWG) 91.40p -3.79%
BlackRock World Mining Trust (BRWM) 640.00p -2.59%
International Personal Finance (IPF) 208.50p -2.34%
Edinburgh Worldwide Inv Trust (EWI) 200.50p -1.72%
Polar Capital Technology Trust (PCT) 433.00p -1.59%
Pinewood Technologies Group (PINE) 373.00p -1.19%
Anglo-Eastern Plantations (AEP) 1,280.00p -1.16%
Allianz Technology Trust (ATT) 494.00p -1.10%
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