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London open: Stocks edge up as investors mull borrowing figures
London stocks edged up in early trade on Wednesday as figures revealed the government borrowed more than expected in December.
At 0845 GMT, the FTSE 100 was up 0.2% at 8,562.95.
Data from the Office for National Statistics showed the government borrowed £17.8bn in December, up £10.1bn on December 2023.
It was above the £14.6bn expected by the Office for Budget Responsibility and consensus expectations of £14.2bn.
It was also the highest figure in four years and the third highest December figure on record.
The ONS said the interest payable on central government debt was £8.3bn in December, largely because of movements in the retail prices index. This was up £3.8bn on December 2023 and the third highest December figure since monthly records began in January 1997.
Danni Hewson, head of financial analysis at AJ Bell, said: “If anyone needed a reminder of the huge challenge being faced by Rachel Reeves, this morning’s public sector borrowing figures spell it out in underlined, bold and capital letters.
“Despite a chunky rise in the tax take of £4 billion the cash coming in just isn’t covering what’s going out, especially when those increases are offset by a fall in National Insurance contributions.
“Add in a significant uptick in debt interest and you’ve got a recipe for continued jitters from financial markets, even if borrowing costs have dropped back from recent highs.
“Finding efficiencies and spending every penny productively is what the Treasury has promised will help, but as the government has spelt out time and again, it’s only growth that can offer an alternative to reigning in ambitions as the chancellor has ruled out pulling any of the other levers available to her.
“It’s important to recognise that these figures do include a one-off payment of £1.7 billion for the repurchase of over 36,000 military homes and that next month will be bolstered by that looming self-assessment deadline, though £2.5 billion of that was paid early and is included in the December data.
“Courting investment, giving the green light to projects like a third runway at Heathrow and pushing regulators to cut red tape are all in the mix but making sure any decisions are the right ones for the country and not just for right now mustn’t be tuned out in all the noise.”
In equity markets, Intermediate Capital Group was the top gainer on the FTSE 100 as it hailed strong fundraising in the third quarter and a 5.1% increase in quarter-on-quarter assets under management.
Aviva jumped after an upgrade to ‘overweight’ from ‘neutral’ at JPMorgan, while Halma was boosted by an upgrade to ‘buy’ from ‘hold’ at Berenberg.
Wealth manager Quilter was a high riser as it reported a jump in assets under management after net inflows soared.
Updating on end of year trading, the firm – a specialist in affluent and high net worth customers – said fourth-quarter reported assets under management and administration were £119.4bn, up from £106.7bn 12 months previously.
On the downside, budget airline easyJet flew lower even as it said it was on track to hit targets this financial year after an in-line performance over its first quarter, as losses halved year-on-year. The company reported a headline loss before tax of £61m for the three months to 31 December, compared with a loss of £126m a year earlier, as group revenues rose 13% to £2.04bn.
Auto Trader took a hit after BNP Paribas Exane slashed its price target on the shares.
Hochschild Mining tumbled even as the South America-focused miner said full-year production had met guidance after a strong final quarter and full contribution from the new Mara Rosa operation in Brazil.
RBC Capital Markets downgraded the shares to ‘sector perform’ from ‘outperform’ and cut the price target to 260p from 300p after the production report.
“Hochschild closed the year broadly in line with expectations, but inflation and the lack of a devaluation in the Argentinian peso have left 2025 cost and capex guidance ahead of our expectations,” it said.
Trainline slid after the Department for Transport confirmed its plans to establish Great British Railways (GBR) as the central online ticket retailer for the rail network once legislation was passed.
Pub chain Wetherspoons was little changed as it said rises in the minimum wage would cost £60m as it reported a 5.1% jump in like-for-like sales in the 25 weeks to 19 January.
Bar sales increased by 4.5%, food by 5.6% and slot/fruit machines by 11.7%. Hotel room sales fell 6.5%.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Intermediate Capital Group Plc | +5.48% | +116.00 | 2,234.00 |
| 2 |  |
Aviva Plc | +3.28% | +16.20 | 510.20 |
| 3 |  |
Wise Plc | +2.31% | +24.00 | 1,064.00 |
| 4 |  |
Halma Plc | +2.19% | +62.00 | 2,897.00 |
| 5 |  |
Ashtead Group Plc | +1.72% | +94.00 | 5,560.00 |
| 6 |  |
Diploma Plc | +1.61% | +72.00 | 4,534.00 |
| 7 |  |
Pershing Square Holdings Ltd | +1.58% | +66.00 | 4,248.00 |
| 8 |  |
Rolls-royce | +1.48% | +8.80 | 602.80 |
| 9 |  |
Beazley Plc | +1.37% | +11.50 | 848.50 |
| 10 |  |
Scottish Mortgage Investment Trust Plc | +1.28% | +13.50 | 1,068.50 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Auto Trader Group Plc | -4.17% | -33.00 | 758.00 |
| 2 |  |
Vodafone Group Plc | -1.75% | -1.22 | 68.42 |
| 3 |  |
Carnival Plc | -1.17% | -22.50 | 1,907.00 |
| 4 |  |
United Utilities Group Plc | -0.96% | -9.60 | 990.00 |
| 5 |  |
Aib Group Plc | -0.95% | -4.50 | 468.50 |
| 6 |  |
Smurfit Westrock Plc | -0.87% | -39.00 | 4,456.00 |
| 7 |  |
Marks And Spencer Group Plc | -0.79% | -2.70 | 339.10 |
| 8 |  |
Coca-cola Hbc Ag | -0.78% | -22.00 | 2,798.00 |
| 9 |  |
Flutter Entertainment Plc | -0.72% | -160.00 | 21,910.00 |
| 10 |  |
Bhp Group Limited | -0.64% | -13.00 | 2,027.00 |
US close: Stocks higher as Trump returns to the White House
Wall Street stocks closed higher on Tuesday as the first trading day of Donald Trump’s second presidential term was a positive one for major indices.
At the close, the Dow Jones Industrial Average was up 1.24% at 44,025.81, while the S&P 500 advanced 0.88% to 6,049.24 and the Nasdaq Composite saw out the session 0.64% firmer at 19,756.78.
The Dow closed 537.98 points higher on Tuesday, extending gains recorded in the previous session.
Trump was still firmly in focus on Tuesday, with the president making tariff comments as he was signing executive orders, stating he was mulling over the idea of slapping 25% tariffs on both Mexico and Canada on 1 February due to their border policies. He also mentioned that China may be in the firing line if the country refuses to approve a deal for the sale of TikTok but fell short of specifying any plans for tariffs.
Elsewhere, Trump declared a national energy emergency to increase fossil fuel production and said he would stop leasing Federal land for wind farm usage as he stated his return to the White House was the beginning of a period of growth and success for the US.
Also drawing an amount of attention, Tesla chief executive Elon Musk, an ally and major financial backer of the president, caused outrage over a one-armed gesture he gave during a speech celebrating Trump’s inauguration. Musk thanked the crowd for “making it happen”, before placing his right hand over his heart and then thrusting the same arm out into the air straight ahead of him, with many likening the gesture to a Nazi salute.
In the corporate space, 3M shares rose after Q4 results met or slightly exceeded market expectations, with adjusted earnings of $1.68 per share surpassing analysts’ estimates of $1.66 and revenue rising marginally to $6.01bn, ahead of the $5.78bn expected.
Elsewhere in the corporate space, shares in streaming giant Netflix soared in extended trading on the back of strong quarterly numbers, with surging revenues and record subscriber numbers.
No major data points were released on Tuesday.
Wednesday newspaper round-up: HMRC, CMA, Santander
Parliament’s spending watchdog has accused HM Revenue & Customs of deliberately running down its phone services to force people to go online after finding the average call waiting time has passed 23 minutes – almost double the figure of two years earlier. With people across the country working to finish their self-assessment return before the 31 January deadline, the public accounts committee (PAC) said it was “concerned that HMRC has degraded its own phone services” in the hope that taxpayers choose other ways to get in touch. – Guardian
The chair of the competition watchdog has been forced to step down after an intervention by Labour ministers, as they try to send a pro-growth message to businesses gathered at the World Economic Forum meeting in Davos. The business department confirmed that the Competition and Markets Authority chair, Marcus Bokkerink, was stepping down on Tuesday evening, just two years after being appointed. Most CMA chairs are expected to serve for up to five years. – Guardian
Britain is at risk of entering a bidding war with Europe for electricity, as countries race to lock in supplies after a sharp drop in wind power. Cold temperatures combined with calm weather have increased energy pressures across Europe, as dwindling domestic generation has led to traders competing to buy electricity. – Telegraph
A particle accelerator in Oxfordshire is to rip up atoms to generate a crucial element for nuclear fusion, under plans proposed by the Government. The UK Atomic Energy Authority (UKAEA) wants to construct a particle accelerator that will generate powerful neutron beams capable of breaking down atoms of lithium, turning them into tritium fuel. – Telegraph
Santander remains committed to the UK, one of its “core markets”, the head of the Spanish banking group has said amid speculation that the lender is preparing to quit Britain. Ana Botín, executive chair, said: “We love the UK, it is a core market, and will remain a core market for Santander for the future. Punto [full stop].” – The Times
