logo
FTSE 100 at new high despite poor borrowing data

FTSE 100 at new high despite poor borrowing data

Independent2 days ago
London's FTSE 100 notched another record close, and hit an all-time intra-day high, despite the threat of higher UK taxes after figures showed a sharp increase in government borrowing.
The FTSE 100 index closed up 10.82 points, 0.1%, at 9,023.81. It had earlier hit a new all-time high of 9,035.37.
The FTSE 250 closed down 78.20, 0.4%, at 21,934.26, and the AIM All-Share closed down 0.74 of a point, 0.1%, at 770.14.
According to the Office for National Statistics (ONS), public sector borrowing totalled £20.68 billion in June, exceeding an FXStreet-cited consensus estimate for £15.6 billion and up from £17.44 billion in May.
It was the second-highest June borrowing since monthly records began in 1993, after that of June 2020, the ONS noted. It was also more than the £17.1 billion forecast by the Office for Budget Responsibility (OBR) in March.
Data showed borrowing through the three months to June totalled £57.8 billion, up £7.5 billion from a year earlier, but in line with an estimate from the OBR.
However, the central Government's net cash requirement was £55.7 billion for the period, £6.7 billion above the OBR forecast.
Russ Mould at AJ Bell said: 'Soaring debt interest payments haven't helped and the situation will further stir speculation that the Government will have to put up taxes in the autumn budget.'
Kathleen Brooks at XTB Research said the issue for the UK is that 'ever-growing public sector costs could lead to consistent tax rises over this parliament'.
She added that the government's unwillingness to 'rein in spending and the lack of realistic debate about public sector services and how much the state can provide could leave the UK in a very tricky position.'
The pound was little changed at 1.3508 dollars late on Tuesday afternoon in London, compared with 1.3506 dollars at the equities close on Monday. The euro traded at 1.1735 dollars, against 1.1711 dollars. Against the yen, the dollar was trading down at 146.49 yen compared with 147.29 yen.
Despite economic concerns, UBS thinks UK equities continue to trade at 'attractive valuations both in absolute and relative terms'.
'Low multiples, combined with high dividend yields underline the UK market's appeal, and there is room for further re-rating if earnings prove resilient and political risks abate. For now, UK equities offer cheapness with a catalyst, the fundamental discount is well known, and any improvement in macro or clarity in policy could help close the gap further,' strategists at the Swiss bank commented.
In European equities on Tuesday, the CAC 40 in Paris lost 0.8%, while the DAX 40 in Frankfurt fell 1.1%.
In New York, the Dow Jones Industrial Average was up 0.1%, the S&P 500 traded down 0.1% and the Nasdaq Composite fell 0.5%.
US Treasury Secretary Scott Bessent said that he would meet his Chinese counterparts in Stockholm next week for tariff talks, eyeing an extension to a mid-August deadline for levies to snap back to steeper levels.
Mr Bessent told Fox Business that he will be speaking to Chinese officials on Monday and Tuesday for a third round of high-level negotiations, to work out what he said would be a likely postponement of the deadline.
Washington and Beijing slapped escalating, tit-for-tat levies on each other's exports earlier this year, reaching triple digit levels and stalling trade between the world's two biggest economies as tensions surged.
But after top officials met in Geneva in May, both sides agreed to lower their tariff levels temporarily in a de-escalation set to expire next month. Officials from the two countries also met in London in June.
'That deal expires on August 12, and I'm going to be in Stockholm on Monday and Tuesday with my Chinese counterparts, and we'll be working out what is likely an extension then,' Mr Bessent said in the interview.
The yield on the US 10-year Treasury was quoted at 4.34%, narrowing from 4.36%. The yield on the US 30-year Treasury was quoted at 4.91%, trimmed from 4.92%.
On London's FTSE 100, Compass Group rose 5.3% after it raised full-year guidance and announced the 1.5 billion euro acquisition of Vermaat Groep.
The Chertsey, England-based contract caterer said the acquisition of European premium food services business Vermaat, for an enterprise value of 1.3 billion euros, is expected to be both margin and earnings per share accretive in the first full year of ownership.
Citi said that with compound annual growth of more than 20% over the last 15 years, and 'double-digit' operating margins, Vermaat appears to be a 'high-quality business'.
In addition, Compass reported organic revenue growth of 8.6% in the three months to June 30, the financial third quarter, and 8.5% for the financial year to date.
As a result, Compass raised its 2025 guidance.
'We now expect constant currency underlying operating profit growth to be towards 11%, driven by organic revenue growth above 8% and ongoing margin progression,' the firm said.
Compass had previously forecast high single-digit growth.
Centrica climbed 4.6% as it said it will jointly acquire a 15% equity stake in the UK's new Sizewell C nuclear plant with the UK government, Electricite de France, and International Public Partnerships, among other investors.
The new power station is currently under construction in Suffolk, targeting a generating capacity of 3.2 gigawatts, which is about 7% of the UK's entire electricity demand. It is expected to cost around £38 billion to build.
Windsor-based British Gas owner Centrica has committed £1.3 billion in construction funding.
But Legal & General fell 2.4% as RBC Capital Markets downgraded it to 'underperform' from 'sector perform', and cut its price target.
On the FTSE 250, Greencore jumped 12% after it raised full-year guidance, after reporting that the good weather and new business wins boosted sales in the financial third quarter.
Greencore now anticipates financial 2025 adjusted operating profit will be in a range of £118 million to £121 million, ahead of previous guidance of £114 million to £117 million.
At the top-end of guidance this would be 21% ahead of £97.5 million posted in the 52 weeks to September 27 2024.
Chief executive Dalton Philips said it was an 'outstanding performance'.
Pennon Group advanced 2.1% after JP Morgan upgraded it to 'overweight' from 'neutral'. Oxford Nanopore added 5.2%, building on Monday's stellar gains.
The biggest risers on the FTSE 100 were Compass Group, up 136.0 pence, at 2,660.0p, Centrica, up 7.45p at 164.1p, Glencore, up 9.8p at 322.55p, WPP, up 12.0p at 425.8p and Entain, up 27.4p at 986.4p.
The biggest fallers on the FTSE 100 were easyJet, down 14.4p at 492.2p, ICG, down 58.0p at 2,112.0p, Melrose Industries, down 13.4p at 522.6p, IAG, down 9.2p at 370.6p and Games Workshop, down 360.0p at 15,840.0p.
Brent oil was quoted lower at 68.30 dollars a barrel in London on Tuesday, from 68.72 dollars late on Monday. Gold climbed to 3,426.29 dollars an ounce against 3,397.12 dollars.
Wednesday's local corporate calendar has trading statements from miner Fresnillo and pub operator JD Wetherspoon and half-year results from international events, digital services and academic research group Informa.
The global economic calendar on Wednesday has eurozone consumer confidence figures and US existing home sales data.
Contributed by Alliance News.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Woody Johnson completes purchase of Crystal Palace shares
Woody Johnson completes purchase of Crystal Palace shares

The Independent

time17 minutes ago

  • The Independent

Woody Johnson completes purchase of Crystal Palace shares

Crystal Palace have confirmed that Woody Johnson's purchase of Eagle Football's shareholding in the club has been completed. American businessman Johnson – who is co-owner of the New York Jets – joins chairman Steve Parish, Josh Harris and David Blitzer as a partner and director of the Eagles, and has also signed the Premier League's Owners' Charter. 'I am honoured and privileged to be joining the ownership group of Crystal Palace Football Club,' Johnson told the Eagles website. 'It is an organisation with a proud history, tradition, and deep roots in English football in South London, which I came to admire during my time as US Ambassador to the United Kingdom. 'Eagles fans have demonstrated extraordinary loyalty, passion, and unwavering dedication and I am excited to meet and get to know them. 'I have great respect for Steve Parish and the leadership he has provided over the years. 'I look forward to working with him and the entire ownership group to build on the club's recent successes and help shape an exciting future for Crystal Palace. 'This is more than an investment – it's a commitment to realising the vision for the club, the community, and the culture around Selhurst Park.' Johnson's arrival at Palace comes with the club in dispute with UEFA over which European competition they will play in next season after winning the FA Cup in May. The Eagles were demoted from the Europa League to the Conference League after falling foul of UEFA's rules governing multi-club ownership, but have submitted an appeal to the Court of Arbitration for Sport. UEFA determined that as of March 1, American businessman John Textor had control or influence in Palace and French club Lyon. Textor said he had agreed to sell his stake in Palace to Johnson, but the move came too late to satisfy UEFA. Parish said: 'At this exciting time for Crystal Palace, we are delighted to be welcoming Woody to the ownership of the football club, and we very much look forward to working alongside him to build on our historic recent success moving forwards.'

FA issue England manager warning ahead of Euros final
FA issue England manager warning ahead of Euros final

The Independent

time17 minutes ago

  • The Independent

FA issue England manager warning ahead of Euros final

The Football Association (FA) is determined to retain Sarina Wiegman as England manager, with chief executive Mark Bullingham stating she is "not for sale" at any price. Wiegman has reached five consecutive major tournament finals, including the last three with the Lionesses, and will lead them in the Euro 2025 final against world champions Spain. Her current contract with the FA extends until the end of the 2027 Women's World Cup, and Bullingham expressed confidence in keeping her in charge. Bullingham praised Wiegman as a "special coach" for her exceptional tournament record, work with players, and ability to maintain a cool head in critical moments. He dismissed suggestions that Wiegman should be considered for the England men's job, asserting it is disrespectful to view the men's role as more senior.

Iconic fashion chain plans UK high street RETURN after going bust and shutting 46 stores
Iconic fashion chain plans UK high street RETURN after going bust and shutting 46 stores

The Sun

time17 minutes ago

  • The Sun

Iconic fashion chain plans UK high street RETURN after going bust and shutting 46 stores

AN iconic fashion chain is planning to make a triumphant return to the high street next year, The Sun can exclusively reveal. Ted Baker is set to make a comeback to the British high street in early 2026, sources close to the matter have said. It is understood the brand is planning to return to London, with more details to be confirmed closer to the time. It's not clear yet how many shops there will be or whether there will be any outside the capital. The news comes more than a year after the much-loved brand dramatically collapsed and shuttered all its stores in August 2024. Founded in 1988, Ted Baker was well-known in the 90s for its clothes and accessories with bold and floral designs. A decade ago it was one of the strongest names in the retail sector with 550 shops and concessions around the world - but has recently ran into major difficulties. Shoppers were shocked when the fashion giant fell into administration in March last year. It brought back its website in November last year, stocking a range of menswear, womenswear and accessories. The website currently ships to the UK only but it says it will offer international shipping "very soon". The Sun has approached Ted Baker for comment. What happened to Ted Baker The company's troubles first began in 2019 after its founder Ray Kelvin quit his role following allegations of harassment. Fashion chain to shut all shops It then put out several profit warnings, which is when a company advises the stock market that profits will be lower than expected. In 2020, the retailer said it would axe 160 jobs. More bad news came in March 2024 it collapsed into administration, putting dozens of stores and hundreds of jobs at risk. By then the company had 86 stores across the UK and 975 employees. No Ordinary Designer Label (NODL), owned by Authentic Brands Group (ABG) and trading as Ted Baker, appointed Teneo as administrators. NODL blamed a deal going sour between its owners and a Dutch operating partner that had allegedly promised to inject cash into the business. By April, Ted Baker had announced it would close 15 stores with the loss of 120 jobs. The Sun exclusively revealed in July 2024 that the brand was at risk of disappearing from the high street forever within weeks. It was then announced that the last of Ted Baker's 31 stores would be closed for good in August. The brand launched huge clearance sales to get rid of its final stock, with at least one store advertising at least 70% off everything. Shoppers raced to clear the shelves of glamorous maxi dresses, winter coats and men's suits at bargain prices before the stores shut forever. Other iconic brands that have come back from collapse Ted Baker wouldn't be the first brand to make a dramatic comeback to the high street. Shirtmaker T.M. Lewin announced last month it would be opening more stores in London, Manchester and Edinburgh. The brand had fallen into administration and shut all of its 66 branches in 2020. Last year, fashion and homeware chain Cath Kidston made a surprise return by opening a store in Westfield White City, London. The retailer had crashed into administration and shut all of its stores in 2023. Wilko also made a high street comeback with stores in England, Scotland, Wales and Northern Ireland almost a year after it went into administration. Meanwhile fashion chain M&Co opened a new store in Scotland a little more than a year after it collapsed. What does going into administration mean? WHEN a company enters into administration, all control is passed to an appointed administrator. The administrator has to leverage the company's assets and business to repay creditors any outstanding debts. Once a company enters administration, a "moratorium" is put in place which means no legal action can be taken against it. Administrators write to your creditors and Companies House to say they've been appointed. They try to stop the company from being liquidated (closing down), and if it can't it pays as much of a company's debts from its remaining assets. The administrator has eight weeks to write a statement explaining what they plan to do to move the business forward. This must be sent to creditors, employees and Companies House and invite them to approve or amend the plans at a meeting. A Notice of Intention is used to inform concerning parties that a company intends to enter administration. It is a physical document which is submitted to court, usually by directors aiming to prevent a company from being liquidated. Like with a standard administration process, a Notice of Intention stops creditors from taking out any legal action over a company while they try and rectify the business.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store