British housebuilders fall as May inflation data spurs rate hike fears

(Reuters) - Shares in British housebuilders's index fell sharply in early trade on Wednesday after May inflation data defied expectations that it would slow, spurring concerns about the impact of elevated mortgage rates on the housing sector.

British consumer price inflation held at 8.7% in May, official figures showed, a day before the Bank of England (BoE) is forecast to raise interest rates for the 13th time in a row.

Strengthening prospects of further BoE rate hikes had stymied hopes of a strong recovery in the UK housing sector, after a smaller-than-expected decline in the inflation rate in April and a surprise jump in wage growth forced some lenders to rein in or reprice mortgage offerings.

FTSE 100 firms Barratt, Persimmon and Taylor Wimpey lost more than 2% each.

Berkeley, another FTSE 100 player, which reported a rise in its annual profit earlier in the day, declined about 2.4%.

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Janane Venkatraman)