The FTSE 100 index is once again below 7000 points today, and although it has risen from its low point of yesterday, it is still languishing at 6,975 as the trading day in London progresses.

This is a 1.3% increase over the previous day, but represents a 2.9% drop over the past 30 days of trading.

One of the main factors in bringing down the value of the FTSE 100 index is the impact that Britain's beleaguered economy is having on housebuilders, and many large British house building companies are listed on the London Stock Exchange and are part of the FTSE 100 index.

For example, Barratt Developments, one of Britain's largest residential construction companies, reported a 12% slowdown in weekly reservations in the period from August 1 to October 1, compared with the same period in 2021 due to what it politely calls ‘the backdrop of rising interest rates and wider economic uncertainty’ - ultimately referring to the rising interest rates putting people off buying houses, and many British banks having withdrawn mortgage products from sale, preventing people from accessing finance in order to buy homes.

Another large, publicly listed house building company, Bellway, recently reduced its its forecast for volume sales this year from 14,000 in its August trading update to ‘a similar level to the prior year’ or around 11,200 homes, which echoes the anticipated slowdown in house purchasing due to the flagging economy and rising interest rates.

Investor behavior has reflected this pessimism as Bellway shares dropped in value yesterday by 1% to £18.07 while Redrow Homes shares also decreased in value by 1.5% to 410p, with shares in Vistry falling 3.6% to 545p.

This has been a pattern that has made itself noticed for quite a few weeks, and the raw materials and mining companies which are included in the FTSE 100 index have been holding their value due to ongoing supply chain problems contributing to high demand for imported minerals and products used for manufacturing, whilst companies whose product relies on the strength of the economy and the ability for consumers to acquire credit have been struggling to maintain any form of growth.

Today, Bellway Homes announced that it has scrapped its plan to build 1,000 more homes this year, demonstrating that a large company which knows its market well is not prepared to invest in building homes that may not be able to be sold, or which would have a limited audience due to the unfavorable conditions toward mortgages at the moment.

During 2021, the FTSE 100 was the darling of investors. It rose above 7,000 and remained at such lofty heights for over a year. During that period, stamp duty (property purchase tax) had been postponed for properties up to a certain value, causing house building company stocks to rise, and big pharma was making a lot of revenues on the back of mandatory vaccines in many countries.

Only now has it begun to dip below the 7,000 mark and the companies causing this to take place are a telling sign of the situation of the overall economy.

Therefore, the pound's lamentable performance recently appears to be intrinsically linked to the performance of the FTSE 100 index.

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