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Major events
More on public finances shortly, but it looks like a fairly soft open on European stock markets today.
Business is usually relatively slow in the days leading up to Christmas for obvious reasons. Early bids pushed the FTSE 100 up 0.2%.
Here are the first images from the European market, via Reuters:
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Europe’s STOXX 600 .STOXX up 0.3%
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France’s CAC 40 up 0.2%, Spain’s IBEX up 0.4%
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Euro stocks index up 0.2%; Euro zone blue chips up 0.2%
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Germany’s DEX up 0.4%
Chancellor Jeremy Hunt has reiterated his position that the UK faces “tough decisions” to reduce government borrowing.
Less than two months later in October Liz Truss and Quasi Kwarteng were quickly removed as prime minister and chancellor respectively, the prospect of increasing debt (via large but unspecified tax cuts) being one of the main factors. Hunt was brought in to steady the ship – a task he has essentially argued required a deficit reduction program to rival the early years of the Conservative government.
hunting Wednesday said:
In the face of two global crises, the pandemic in Ukraine and Putin’s war, we have taken significant action to support millions of businesses and families here in the UK.
We have a clear plan to help halve inflation next year, but that requires some tough decisions to get our public finances back on a sustainable footing.
The UK government borrowed a record £22bn in November
Good morning, and welcome to our rolling, live coverage of business, economics and financial markets.
The UK government borrowed £22bn in November, a record amount for the month amid massive energy price support schemes for homes and businesses across the country.
The Office for National Statistics (ONS) said that borrowing was £13.9bn more in November 2021 than in the same month and was the highest in November since monthly records began in 1993.
Government energy price guarantees for households and equivalent support for businesses are costly interventions, requiring large monthly borrowings. During 2022, Russia’s invasion of Ukraine and the resulting disruption in global energy supply have led to a sharp increase in energy prices.
Public sector net borrowing (excluding banks bailed out during the financial crisis) was £105.4bn in the financial year to November 2022, the fourth highest since 1993 and £50.8bn more than in 2019, before the government began a massive UK lockdown during the coronavirus. Spending plans to protect the economy.
The effects of rising inflation are also becoming apparent: the UK borrows heavily by issuing index-linked gilts (UK government bonds, known as linkers, whose payments are linked to the retail price index of inflation). Rising inflation has pushed up those payments to bondholders, so central government debt interest payable in November 2022 was £7.3bn, £2.4bn more than in November 2021 and the highest November figure since monthly records began in April 1997.
agenda
11am GMT: Confederation of British Industry (CBI) Retail Data (December; Previous: -19 points; Consensus: -23 points)
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