London pre-open: Stocks to nudge up as govt borrowing jumps to £17.8bn

(Sharecast News) - London stocks were set to nudge up at the open on Wednesday as figures revealed the government borrowed more than expected in December. The FTSE 100 was called to open just five points higher.

According to the Office for National Statistics, the government borrowed £17.8bn in December, 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.

Alex Kerr, UK economist at Capital Economics, said: "Against a backdrop of slowing GDP growth and high interest rates, December's overshoot in borrowing is further disappointing news for the Chancellor.

"That said, most of the overshoot was because of a one-off payment and components that are heavily revised so the figures may not be as bad as they first appear. But the figures leave the current budget deficit on track to overshoot the OBR's forecast of £55.5bn in the 2024/25 fiscal year by around £1.5bn."

In corporate news, budget airline easyJet 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.

EasyJet said it was seeing strong demand heading into a traditionally busy Easter period, while bookings continue to build for summer.

Pub chain Wetherspoons 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%.

Trainline welcomed the UK government's commitment to maintaining a competitive rail ticket retail market, as part of Great British Railways (GBR).

The FTSE 250 company said the transition to the new nationalised train operator would take several years, adding that it supported the government's emphasis on ensuring a level playing field for all retailers. It said it would participate in the upcoming industry-wide consultation on the Rail Reform Bill.