London midday: Stocks stay up after borrowing figures

(Sharecast News) - London stocks were still firmer by midday on Wednesday as figures revealed the government borrowed more than expected in December. The FTSE 100 was up 0.3% at 8,570.17.

Data from the Office for National Statistics showed the government borrowed £17.8bn, 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 also a high riser as it reported a jump in fourth-quarter assets under management after net inflows soared.

On the downside, Auto Trader took a hit after BNP Paribas Exane slashed its price target on the shares.

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.

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

Hochschild Mining tumbled after the miner forecast higher production costs due to soaring inflation in Argentina and a slower-than-expected ramp-up of operations at its Mara Rosa mine in Brazil.

Trainline fell 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 slipped 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%.

Market Movers

FTSE 100 (UKX) 8,570.17 0.26% FTSE 250 (MCX) 20,669.07 0.36% techMARK (TASX) 4,712.98 0.39%

FTSE 100 - Risers

Intermediate Capital Group (ICG) 2,248.00p 6.14% Halma (HLMA) 2,942.00p 3.77% Aviva (AV.) 510.80p 3.40% Diploma (DPLM) 4,564.00p 2.29% Rolls-Royce Holdings (RR.) 607.00p 2.19% Smiths Group (SMIN) 1,887.00p 1.94% Beazley (BEZ) 853.00p 1.91% Pershing Square Holdings Ltd NPV (PSH) 4,258.00p 1.82% Entain (ENT) 691.80p 1.80% Ashtead Group (AHT) 5,564.00p 1.79%

FTSE 100 - Fallers

Auto Trader Group (AUTO) 760.20p -3.89% easyJet (EZJ) 493.90p -3.38% Fresnillo (FRES) 677.00p -2.38% Vodafone Group (VOD) 68.26p -1.98% United Utilities Group (UU.) 980.20p -1.94% Marks & Spencer Group (MKS) 337.60p -1.23% Severn Trent (SVT) 2,499.00p -1.03% Unite Group (UTG) 831.50p -0.78% Smith & Nephew (SN.) 1,028.50p -0.77% Sainsbury (J) (SBRY) 258.60p -0.77%

FTSE 250 - Risers

Abrdn (ABDN) 152.25p 2.94% Herald Investment Trust (HRI) 2,385.00p 2.80% Alpha Group International (ALPH) 2,445.00p 2.73% Kier Group (KIE) 147.00p 2.51% Me Group International (MEGP) 211.00p 2.43% Aston Martin Lagonda Global Holdings (AML) 115.40p 2.40% IP Group (IPO) 52.20p 2.35% Softcat (SCT) 1,530.00p 2.34% AJ Bell (AJB) 468.00p 2.30% Future (FUTR) 917.00p 2.17%

FTSE 250 - Fallers

Hochschild Mining (HOC) 197.20p -13.89% Trainline (TRN) 365.20p -6.84% Oxford Nanopore Technologies (ONT) 151.50p -2.26% Pennon Group (PNN) 525.00p -2.23% Carnival (CCL) 1,888.00p -2.15% Wetherspoon (J.D.) (JDW) 600.00p -1.88% Vistry Group (VTY) 588.50p -1.75% Safestore Holdings (SAFE) 591.00p -1.66% Wizz Air Holdings (WIZZ) 1,412.00p -1.47% Wood Group (John) (WG.) 68.35p -1.37%