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London stocks on the FTSE fell in early trade on Friday as data showed that UK borrowing significantly overshot expectations in February, with airlines in the red as Heathrow was shut after a fire caused a power outage.
At 0820 GMT, the FTSE 100 was down 0.2% at 8,680.93.
Figures from the Office for National Statistics showed the government borrowed £10.7bn in February, up £100m on the same month last year.
This was the fourth highest figure on record for that month and well above the Office for Budget Responsibility’s forecast of £6.5bn. It was also above economists’ forecasts of £7bn.
Borrowing is the difference between what the government spends on the public sector and what it gets in income from tax and other receipts.
For the year to February, borrowing came in at £132.2bn, up £14.7bn on the same period a year earlier.
Jessica Barnaby, deputy director for public sector finances at the ONS, said: “At £10.7bn, public sector borrowing in the month of February was virtually unchanged on the same month last year. However, borrowing over the financial year to date was up nearly £15bn on the equivalent period last year.”
Chancellor Rachel Reeves is due to deliver her Spring statement next week.
Alex Kerr, UK economist at Capital Economics, said: “Ultimately, today’s release will have no influence on how much the Chancellor needs to tighten fiscal policy at next week’s fiscal update. Higher gilt yields and the weaker economy have probably wiped out the Chancellor’s headroom of £9.9bn.
“And in order to restore that buffer, on top of the £5.0bn of welfare cuts already announced, we think she will cut non-defence departmental spending by around £6.5bn.”
Investors were also waking up to news that London’s Heathrow airport is closed until midnight GMT after a fire at an electricity substation in the local area caused a “significant” power outage, hitting more than 1,000 slights and 16,000 homes.
Flights that were already enroute to the west London airport were forced to divert, according to the specialist website Flightradar24. Video footage shows an enormous blaze at the substation in Hayes, west London.
Passengers have been told not to travel to the airport “under any circumstances” and warned “significant disruption” is expected in the coming days.
British Airways, which had 341 flights scheduled to land at Heathrow on Friday, said the fire would “clearly have a significant impact on our operation and our customers, and we are working as quickly as possible to update them on their travel options for the next 24 hours and beyond”.
Unsurprisingly, airlines were under the cosh, with BA and Iberia owner IAG, easyJet and Wizz Air all down.
JD Sports was the biggest loser on the FTSE 100, however, after a disappointing update from Nike.
Pub owner JD Wetherspoon slumped as it reinstated its interim dividend after a solid increase in first-half underlying sales, but warned of the impact of rising labour costs on the business, which will hit each of its pubs by £1,500 per week.
Chair Tim Martin said that increases in national insurance contributions and minimum wages, announced in the last Budget, would increase company costs by £60m a year.
Ferrexpo slid as it said that Ukrainian tax authorities have suspended VAT refunds totalling UAH 512.9m ($12.5m) for January to its subsidiaries FPM and FYM, citing personal sanctions on major shareholder Kostiantyn Zhevago.
The FTSE 250 company said the sanctions were not directed at Ferrexpo or its subsidiaries, and criticised the move as unjustified financial pressure.
It said the suspension would strain its liquidity, forcing cuts to production and sales, with broader negative impacts on local procurement, tax contributions, and Ukraine’s economy.
On the upside, Sainsbury’s rose on the back of an upgrade to ‘buy’ from ‘hold’ at HSBC.
Gas producer Energean gained after saying it has pulled its $945m deal to sell some of its assets to private equity fund Carlyle due to pending regulatory approvals in Italy and Egypt.
Housebuilder Crest Nicholson rallied after an upgrade to ‘outperform’ from ‘sector perform’ at RBC Capital Markets.
Asos surged after the online fashion retailer lifted its profit outlook for the first half.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Gsk Plc | +0.99% | +15.00 | 1,526.00 |
| 2 |  |
Melrose Industries Plc | +0.89% | +4.80 | 541.20 |
| 3 |  |
3i Group Plc | +0.89% | +33.00 | 3,722.00 |
| 4 |  |
Sse Plc | +0.86% | +13.50 | 1,582.00 |
| 5 |  |
Centrica Plc | +0.79% | +1.15 | 146.10 |
| 6 |  |
Aib Group Plc | +0.73% | +4.00 | 549.00 |
| 7 |  |
Reckitt Benckiser Group Plc | +0.58% | +30.00 | 5,230.00 |
| 8 |  |
Vodafone Group Plc | +0.56% | +0.42 | 74.86 |
| 9 |  |
Bt Group Plc | +0.49% | +0.80 | 164.00 |
| 10 |  |
London Stock Exchange Group Plc | +0.49% | +55.00 | 11,305.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Antofagasta Plc | -4.24% | -81.00 | 1,828.50 |
| 2 |  |
Crh Plc | -4.06% | -308.00 | 7,284.00 |
| 3 |  |
South32 Limited | -3.11% | -5.40 | 168.40 |
| 4 |  |
Ferguson Enterprises Inc. | -2.82% | -360.00 | 12,390.00 |
| 5 |  |
Intercontinental Hotels Group Plc | -2.66% | -228.00 | 8,346.00 |
| 6 |  |
International Consolidated Airlines Group S.a. | -2.31% | -6.70 | 283.90 |
| 7 |  |
Flutter Entertainment Plc | -2.29% | -430.00 | 18,360.00 |
| 8 |  |
Anglo American Plc | -2.24% | -52.00 | 2,274.50 |
| 9 |  |
Glencore Plc | -2.16% | -6.70 | 303.30 |
| 10 |  |
Barclays | -2.15% | -6.50 | 295.55 |
US close: Early gains erased as Fed-fuelled optimism fades
US stock markets finished a volatile session with small losses on Thursday, with indices struggling for direction for most of the day in the aftermath of the Federal Reserve policy meeting.
The Dow finished more or less flat, while the S&P 500 fell 0.2% and the Nasdaq lost 0.3%.
It was a tumultuous day for stocks, with futures falling sharply before the opening bell before recovering by mid-morning and then slumping once again in late-afternoon trade.
Commenting on the pre-market losses earlier on, David Morrison, senior market analyst at Trade Nation said: “Perhaps it simply indicates skittishness amongst traders. There’s currently a high level of uncertainty prevalent amongst market participants due to all the complex geopolitical factors currently at play, together with the mercurial nature of the Trump administration.”
FOMC aftermath
Stocks rose strongly on Wednesday on the back of comments by Fed chair Jerome Powell. While the Fed left interest rates on hold, as expected, Powell said that a predicted increase in inflation – due to an escalating trade war – would likely only be “transitory”, with the dot plot still pointing to two interest-rate cuts this year.
The Federal Open Market Committee did, however, lower its growth projections and raise its forecasts for inflation amid increased economic uncertainty.
“Great uncertainty remains over the direction of travel for the US economy, with business activity likely to remain subdued until we see greater clarity over the trade relationships and potential pricing for US imports and exports. Nonetheless, the Fed stand ready to act where necessary,” said Joshua Mahony, chief market analyst at Scope Markets.
A series of economic indicators met or beat forecasts on Thursday: jobless claims rose by just 2,000 last week, more or less hitting consensus estimates; the Philly Fed manufacturing index fell to 12.5 from 18.1 but topped the 8.5 forecast; while existing home sales bounced back 4.2% to 4.26m in February after falling 4.7% the previous month, comfortably beating the 3.95m expected.
A surge in oil prices was likely also weighing on investors’ minds, with WTI crude up 1.7% at $68.30 a barrel amid heightened geopolitical tensions. Meanwhile, safe-haven demand was helping the price of gold, with Comex futures up 0.3% at $3,051.60 an ounce, as bullion continues to climb to new heights.
Market movers
Shares in Accenture slumped 7% after the consultancy group said that a crackdown on US federal spending – led by Elon Musk’s DOGE initiative – was weighing on revenues.
Tesla finished slightly up despite the news that the electric vehicle maker is having to recall more than 46,000 Cybertrucks to fix a problem with an exterior trim panel.
Cosmetics giant Coty was bolstered by an upgrade from Citi to ‘buy’, while used-car platform Carvana was lifted by a upgrade by Piper Sandler to ‘overweight’; Stellantis on the other hand fell after Piper Sandler cut the carmaker to ‘neutral’.
Data storage firm Micron Technology edged higher ahead of its earnings report due out after the close, while sporting goods giant Nike and logistics group FedEx both declined before their quarterly figures were released.
Friday newspaper round-up: Net zero, National Trust, Apple
The government is “absolutely up for the fight” over net zero, Ed Miliband has said, as he accused the Conservatives and Reform of “a total desertion and betrayal” of future generations by failing to tackle the climate crisis. After a turbulent week for Labour in which it has been charged with abandoning its values by slashing disability benefits, the energy secretary sought to focus attention on the party’s plans for the green energy transition. – Guardian
The National Trust has frozen all but essential recruitment and is pausing some projects as it faces a £10m jump in labour costs this year as a result of higher employment costs stemming from last autumn’s budget. The conservation charity, which looks after 500 historic houses, castles, parks and gardens, as well as 780 miles of coastline and 250,000 hectares of land, said the extra costs were the result of changes to employers’ national insurance contributions and an increase in the legal minimum wage, which both come into force next month. – Guardian
Rachel Reeves has demanded government departments provide her with real-time public spending updates, as she ramps up a Treasury power grab ahead of next week’s Spring Statement. As part of the Chancellor’s plan to save billions of pounds, officials have been told they must provide instant and accessible data on how much they are spending and what it will achieve. – Telegraph
Expats will be cut off from scores of BBC radio stations and podcasts in a shake-up of the public service broadcaster’s international output. Starting in a matter of weeks, the BBC will no longer allow access to Sounds – its audio streaming service – from abroad. Instead, international audiences will need to tune into radio and podcasts on a new advertising-funded service on BBC.com or the broadcaster’s app. – Telegraph
The American technology behemoth Apple is said to be losing $1 billion a year on its streaming service as competition with rivals such as Netflix intensifies. The Cupertino-based group has spent more than $5 billion a year on content since launching Apple TV+ in 2019 but cut it by around $500 million last year, according to The Information. – The Times
