London pre-open: Stocks seen up as investors mull borrowing data

(Sharecast News) - London stocks were set to gain at the open on Wednesday as investors mulled the latest borrowing figures. The FTSE 100 was called to open around 11 points higher.

Data released earlier by the Office for National Statistics showed that government borrowing was higher than expected in July.

Borrowing came in at £3.1bn, up £1.8bn on July 2023 and £100m higher than the Office for Budget Responsibility was expecting. It was also above the £2.5bn expected by economists and marked the highest borrowing figure for July since 2021.

Cumulative borrowing in the first four months of the fiscal year was £51.4bn. This was £500m less than in the same period a year earlier, but £4.7bn more than the OBR had forecast in March.

Jessica Barnaby, deputy director for public sector finances at the ONS, said: "Revenue was up on last year, with income tax receipts in particular growing strongly.

"However, this was more than offset by a rise in central government spending where, despite a reduction in debt interest, the cost of public services and benefits continued to increase."

In corporate news, public bus operator Mobico held annual guidance after a jump in adjusted interim operating profit driven by positive demand and cost cuts.

Profit for the six months to June 30 rose 23.8% to £71.2m while on a pre-tax basis the company narrowed losses to £1.5m from £52m a year earlier. No dividend was declared as the group, formerly known as National Express, continues to deleverage.

It still expects adjusted operating profit for 2024 to be within the range of £185m to £205m.

The Competition and Markets Authority said the allowances made by Barratt Developments and Redrow in order to pave the way for regulatory approval may just be enough to get the green light.

The initial phase of a CMA investigation revealed issues in one of the 400 local areas where the two companies overlap, prompting the housebuilders to agree on "suitable undertaking" to address these concerns.

The CMA said on Wednesday it "considers that there are reasonable grounds for believing that the undertakings offered by the parties or a modified version of them, might be accepted by the CMA under the Enterprise Act 2002".

Molten Ventures said the recent secondary share sale by Revolut at a $45bn valuation could increase the gross value of its holding in Revolut to around £160m, representing a £95m uplift from March.

The FTSE 250 firm said the exact impact on its net asset value would be determined after accounting for carried interest, potential valuation adjustments, and corporation tax on capital gains. It said it would update the market with a trading announcement ahead of its interim results to 30 September.