FTSE 100 LIVE: London stocks slide as UK borrowing hits £10.7bn in February

Yahoo

21-03-2025

The FTSE 100 (^FTSE) and European stocks were lower on Friday morning as UK public borrowing hit £10.7bn in February, higher than the £6.6bn forecasted by City economists.
According to the Office for National Statistics (ONS), government borrowing hit £132.2bn overall in the financial year to February, which is £14.7bn more than the same period a year earlier. The Treasury's surplus for January was also revised down to £13.3bn.
Meanwhile, national debt has climbed to around 95.5% of gross domestic product (GDP), leaving it at levels last seen in the early 1960s. Public sector net debt excluding public sector banks was 0.1 percentage points higher than at the same point last year.
It comes ahead of next week's spring statement where chancellor Rachel Reeves is set to announce spending cuts, alongside fresh economic and public finance forecasts from the Office for Budget Responsibility.
Read more: Rachel Reeves under pressure as UK government borrowing overshoots
Alex Kerr, UK economist at Capital Economics, said: "Although they will have no impact on the fiscal update next week, the significant overshoot in borrowing in February highlights the chancellor's tight fiscal backdrop. The OBR will still most likely conclude that the chancellor's headroom against her fiscal rules has been wiped out.
"So we expect her to announce further non-defence spending cuts, on top of the welfare cuts already unveiled earlier this week."
Traders will also have their eyes on airline stocks on Friday as markets assess the fallout of the fire near Heathrow which forced the UK's largest airport to close.
More than 1,300 flights are expected to be affected by the fire at the North Hyde electrical substation in west London. A nearby fire triggered a 'significant' power cut. Shares in British Airways owner IAG (IAG.L) have already fallen more than 4%.
London's benchmark index (^FTSE) was 0.5% lower in early afternoon trade with airlines in the red
Germany's DAX (^GDAXI) dipped 0.9% and the CAC (^FCHI) in Paris headed 0.8% into the red
The pan-European STOXX 600 (^STOXX) was down 0.7%
Wall Street is set for a positive start as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the green
The pound was 0.2% lower against the US dollar (GBPUSD=X) at 1.2939
Follow along for live updates throughout the day:
Wall Street opened down this afternoon amid worries over the possible fallout from Donald Trump's tariff plans weighed on the market.
The S&P 500 is down 0.9% the Dow Jones is down 1% and the Nasdaq is down 0.6%.
AstraZeneca (AZN.L) said on Friday that it will spend $2.5bn on a research and development hub in Beijing as it looks to revive business in its second-biggest market. It comes after scandals including the arrest of its China president last year.
Boss Pascal Soriot was in Beijing and met with the city's mayor to reveal the investment, along with two licensing deals with Chinese companies, and a joint venture with a third Chinese firm on vaccines.
"This $2.5bn investment reflects our belief in the world-class life sciences ecosystem in Beijing, the extensive opportunities that exist for collaboration and access to talent, and our continued commitment to China", Soriot said in a statement.
The R&D centre "will partner with the cutting-edge biology and AI science in Beijing and be a critical part of our global efforts to bring innovative medicines to patients worldwide", Soriot said.
The centre in Beijing will be the company's second R&D site in China - a centre in Shanghai opened in 2024 - to match two such centres each that AstraZeneca has in the U and Europe, respectively, a company spokesperson said.
The Chinese government has launched several investigations into AstraZeneca's executives and activities in the country, where the drugmaker has invested billions of dollars to build factories and license experimental drug candidates from Chinese biotech firms.
China accounted for about 12% of group revenue last year.
Four of the UK's biggest sports broadcast and production companies have been fined more than £4m for illegally colluding on freelance pay rates.
The UK's competition regulator said the BBC, BT (BT-A.L), IMG and ITV (ITV.L) must pay a combined £4.24m after being found to have shared information about fees for freelance workers including camera operators and sound technicians.
Sky also admitted breaking the law but avoided a fine after alerting the Competition and Markets Authority (CMA) to its involvement before the investigation began.
Freelancers are used by all five firms to create sports content and work on productions of live matches and events.
The CMA said it found 15 examples of two companies illegally sharing information about pay — such as day rates and increases - in order to co-ordinate how much to pay freelancers.
Elon Musk urged Tesla (TSLA) employees to 'hang on' to their shares in a meeting that addressed concerns about the electric carmaker's tumbling share price and arson attacks on its showrooms and vehicles.
The Telegraph has the details:
In an unannounced 'all hands' gathering, the billionaire said recent news coverage of the company felt 'like Armageddon' but insisted its prospects remain strong.
His comments come after a 37pc drop in Tesla's share price this year, which has slashed the carmaker's market capitalisation from around $1.2 trillion (£930bn) to $740bn in less than three months.
The downturn followed warnings that Mr Musk's strong support of Donald Trump – and key role in running the US president's new department of government efficiency (Doge) – was scaring off customers.
The backlash against Mr Musk recently led to protestors launching violent attacks against some Tesla dealerships, which has prompted an FBI investigation.
Speaking to staff in Texas on Thursday, Mr Musk insisted things were better than they appeared.
He said:
'Overall, it's good. If you read the news, it feels like Armageddon.
'I can't walk past the TV without seeing a Tesla on fire. You're like, 'What's going on?' You know, some people, it's like, 'I understand if you don't want to buy our product, but you don't have to burn it down, that's a bit unreasonable.'
'Like, this is psycho. Stop being psycho!'
Nike (NKE) beat modest earnings expectations with new CEO Elliott Hill, but investors remain jittery over the impact of Trump tariffs.
Shares in Nike fell by more than 5.5% in pre-market trading on Friday.
The footwear giant posted its fiscal third quarter earnings on Thursday after market close. Its revenue of $11.3bn (£8.7bn) surpassed estimates of $11bn, though a drop compared to the $12.4bn from a year ago.
Adjusted earnings per share came in at $0.54 compared to estimates of $0.30, but also under last year's $0.98.
The earnings report is the second under Hill, a company veteran who took the helm on 14 October. Shares initially popped, then dropped roughly 5% in after-hours trading as the company shared its fourth quarter guidance.
CFO Matthew Friend warned of the impact of US president's Donald Trump's tariffs, including a 20% duty on all goods from China.
"We expect fourth quarter gross margins to be down approximately 400 to 500 basis points, including restructuring charges during the same period last year. We have included the estimated impact from newly implemented tariffs on imports from China and Mexico," Friend said on the earnings call.
UK-listed stocks also took a hit. JD Sports (JD.L) fell around 4.7% in early trade as the fashion industry digests a potential wider problem.
Time has run out for first-time buyers hoping to take advantage of the current stamp duty exemption on homes up to £425,000.
From 1 April, those completing on a property in England and Northern Ireland will be liable for duty on purchases over £300,000, substantially increasing the costs of buying.
But it's not all bad news as plenty of properties are on the market within the lower £300,000 threshold — even in London and the south east where prices are highest.
Here's a selection to get you started
Investors woke up to news that London's Heathrow airport is closed until midnight after a fire at an electricity substation in the local area caused a "significant" power outage, hitting more than 1,000 slights and 16,000 homes.
Flights that were already enroute to the west London airport were forced to divert, according to the specialist website Flightradar24. Video footage shows an enormous blaze at the substation in Hayes, west London.
Here's what been happening in equity markets in London this morning:
Unsurprisingly, airlines were under the cosh, with BA and Iberia owner IAG (IAG.L), easyJet (EZJ.L) and Wizz Air (WIZZ.L) all down.
JD Sports (JD.L) was the biggest loser on the FTSE 100 (^FTSE), however, after a disappointing update from Nike (NKE).
Pub owner JD Wetherspoon (JDW.L) slumped as it reinstated its interim dividend after a solid increase in first-half underlying sales, but warned of the impact of rising labour costs on the business, which will hit each of its pubs by £1,500 per week. Chair Tim Martin said that increases in national insurance contributions and minimum wages, announced in the last budget, would increase company costs by £60m a year.
Ferrexpo (FXPO.L) slid as it said that Ukrainian tax authorities have suspended VAT refunds totalling UAH 512.9m ($12.5m) for January to its subsidiaries FPM and FYM, citing personal sanctions on major shareholder Kostiantyn Zhevago. The FTSE 250 (^FTMC) company said the sanctions were not directed at Ferrexpo or its subsidiaries, and criticised the move as unjustified financial pressure. It said the suspension would strain its liquidity, forcing cuts to production and sales, with broader negative impacts on local procurement, tax contributions, and Ukraine's economy.
On the upside, Sainsbury's (SBRY.L) rose on the back of an upgrade to 'buy' from 'hold' at HSBC.
Gas producer Energean (ENOG.L) gained after saying it has pulled its $945m deal to sell some of its assets to private equity fund Carlyle (CG) due to pending regulatory approvals in Italy and Egypt.
Housebuilder Crest Nicholson (CRST.L) rallied after an upgrade to 'outperform' from 'sector perform' at RBC Capital Markets.
Asos (ASC.L) surged after the online fashion retailer lifted its profit outlook for the first half.
Ahead of the new financial year, consumer group Which? has revealed its 2025 rankings for providers of stocks and shares individual savings accounts (ISAs).
ISAs offer tax-free growth on savings and investments, with an annual allowance as to what you can save into these types of account of £20,000. That allowance resets at the start of the new tax year, which begins on 6 April.
Stocks and shares ISAs are one of four types of ISA — along with cash, lifetime and innovative finance ISAs. As the name suggests, stocks and shares ISAs allow people to invest their savings in stocks, bonds and funds.
Savers can open stocks and shares ISAs with a number of providers, including banks and investment platforms, though the fees they charges for using this service do vary.
In January, Which? surveyed more than 3,600 investors about their experiences using 25 different providers over the last 12 months which they rated on criteria including value for money, ease of use and customer service. The consumer group also looked at each provider's fee structure, analysing a total of 350 fee scenarios to establish the best value platforms.
Which? looked at the impact of fees on seven different sizes of ISA portfolio, ranging from £5,000 to £500,000. The consumer group found that the differences were particularly significant for the largest portfolios, with analysis showing that investors could save as much as £2,000 per year in fees by picking a cheaper platform.
With a new financial year around the corner, Which? said that now was the perfect time for investors to review their fees to ensure that they're maximising returns on their savings.
Find out more here
Russia's central bank has kept its key interest rate unchanged 21%, just days after president Vladimir Putin urged economic officials to avoid 'excessive cooling' of the economy 'like in a cryotherapy chamber.'
Russian policymakers hiked the interest rate to 21% in October, marking the highest level since the early 2000s, but today said more rate hikes could be on the cards as inflationary pressures remain high.
The Bank of Russia said in a statement on Friday:
"The Bank of Russia estimates that the achieved tightness of monetary conditions creates the necessary prerequisites for returning inflation to the target in 2026.
"If inflation dynamics do not ensure achieving the inflation target, the Bank of Russia will consider raising the key rate."
It comes as inflation in Russia remains stubbornly high, the latest data showed the annual rate slipped slightly but remained above 10%. The central bank's target is 4%
JD Wetherspoon (JDW.L) has reported an increase in first-half sales and earnings for the period to 26 January and reintroduced its dividend as the British pub chain sounded the alarm on rising staffing costs.
Like-for-like sales were 4.8% higher versus the previous year, while basic earnings per share rose from 20.3p to 21.5p, it announced on Tuesday.
The company also said that in the last seven weeks, to 16 March 2025, like-for-like sales increased by 5%.
Although sales were on the up, the company warned of the impact a hike in national insurance payments will have on 1 April, with an estimated increase in cost of approximately £60m per year.
'Since labour costs are around 35% of the pub industry's sales, compared to around 11% for supermarkets, increases of this nature inevitably have a disproportionate impact on pubs, exacerbating the already-wide price differential for customers between the on and off-trade," said company chairman Tim Martin in an emailed statement.
'The combination of much higher VAT rates for pubs than supermarkets, combined with increased labour costs will weigh heavily on the pub industry," he added.
For its first half, operating profit was down 4.3% to £64.8m. Profit before tax also fell 8.6% to £32.9m.
"The cost of a burger and pint will have to rise to help mitigate this pressure, which hardly encourages more punters through the door," said Charlie Huggins, manager of the Quality Shares Portfolio at Wealth Club.
"In all, aside from the depths of the pandemic, life has probably never been tougher for pub and bar operators. Wetherspoons has scale advantages others lack and a mightily loyal customer base, which really helps. But it is not immune to industry pressures."
Read the full article here
UK consumer confidence went up one point in March with marginal improvements in the perception of the economy.
The index rose for the second month in a row, edging upwards to -19 from a measure of -20. The new reaching represents a three-month high but is still below the survey's long-run average of -10.
Personal financial situation
The index measuring changes in personal finances during the last year is down two points at -9; this is four points better than March 2024.
The forecast for personal finances over the next 12 months is down one point at +1, which is one point worse than this time last year.
General economic situation
The measure for the general economic situation of the country during the last 12 months is up two points to -42; this is three points better than in March 2024.
Expectations for the general economic situation over the next 12 months have improved two points to -29; but this is six points worse than March 2024.
Major Purchase Index
The Major Purchase Index is unchanged at -17; this is ten points better than this month last year.
Savings Index
The Savings Index has tumbled five points to +25 in March; this is the same as this time last year.
Neil Bellamy, consumer insights irector, NIQ GfK, said:
'Consumer confidence remains subdued with a headline score of -19 for March. Views on personal finances for the past year are slightly down from -7 to -9, while perceptions of the wider economy over the last 12 months and looking ahead a year are each up two points at -42 and -29 respectively. But this is only a marginal improvement. Since September last year, the headline has been in a range of -17 to -22.
"This is more positive than mid-2022 into early 2023 at the height of the cost-of-living crisis, which delivered the worst headline scores ever including nine months at -40 or worse. But we are still below the long-term average of -10. If consumer confidence were a patient languishing in a hospital bed, a doctor would say there is little evidence of a recovery as yet. Where do we go from here? The current stability is to be welcomed but it won't take much to upset the fragile consumer mood.'
Inheritance tax (IHT) receipts have already reached a record high with a month of the tax year still to come, according to the latest data from HMRC.
This is £700m higher than the same ten months last year and continues the upward trajectory over the last two decades. HMRC raised £7.499bn in 2023-4 tax year, but these figures show that they are well on track to smash through this figure for the 2024-5 tax year end.
Nicholas Hyett, investment manager at Wealth Club said:
'Inheritance tax continues to be a meal ticket for HMRC. It may only affect a small percentage of estates, but that number is growing. OBR estimates suggest nearly 10% of estates will pay death duties by 2030 due to increasing house prices, changes to inheritance tax rules and years of allowance freezes.
While we don't expect to see any more changes to Inheritance Tax announced at next week's Spring Statement, the changes announced in the autumn are yet to kick in and will increase the inheritance tax take substantially over the next few years.
The main inheritance tax allowance has now been frozen at £325,000 for 15 years, and remains frozen for another 5 years until 2030, while the £175,000 residence nil rate band hasn't changed since 2020. These freezes are a form of stealth tax, which allows the government to increase their take without a backlash from a headline grabbing tax hike, but still contribute to the highest tax burden in 70 years.
With inheritance tax reliefs for AIM and private businesses set to be severely restricted, it has rarely been more difficult to avoid the taxman having your cake and eating it too.
Lifetime gifts are probably more attractive than ever, particularly regular gifts out of leftover income since these are immediately free of inheritance tax. This approach is particularly popular with grandparents, who use it to pay for things like school or university fees. Avoiding double taxation from inheritance tax is a nice added sweetener.'
Traders have their eyes on airline stocks at the moment as markets assess the fallout of the fire near Heathrow which forced the UK's largest airport to close.
More than 1,300 flights are expected to be affected by the fire at the North Hyde electrical substation in west London. A nearby fire triggered a 'significant' power cut and more than 4,900 homes have been left without power.
Passengers are being urged to avoid travelling to the airport "until further notice".
Shares in British Airways owner IAG (IAG.L) have already fallen more than 4% on the back of the news.
UK government borrowing significantly exceeded expectations in February, according to official data, intensifying the pressure on chancellor Rachel Reeves as she prepares for her spring statement next week.
In February, the government borrowed £10.7bn, marking the fourth-highest February figure since records began in 1993, according to the Office for National Statistics (ONS). This was well above the City's forecast, which had anticipated borrowing of around £7bn.
For the financial year to February, borrowing totalled £132.2bn, a rise of £14.7bn compared to the same period in the previous year. In October, the Office for Budget Responsibility (OBR) had projected that public sector borrowing would reach £127.5bn for the entire financial year, which ends in March. An updated OBR forecast is expected to be published during her spring statement on Wednesday.
Jessica Barnaby, deputy director for public sector finances at the ONS, said: "At £10.7bn, public sector borrowing in the month of February was virtually unchanged on the same month last year. However, borrowing over the financial year to date was up nearly £15bn on the equivalent period last year."
The borrowing figure refers to the difference between what the government spends on the public sector and what it receives in income from tax and other receipts.
Overall spending on public services increased compared with the same month last year, with things like social benefits and investment spending more than had been forecast, the ONS said.
Reeves is set to use the spring statement to announce further cuts to government spending in an effort to maintain fiscal discipline. Under her fiscal rules, the chancellor has committed to balancing the current budget, which excludes government investment, by 2029-30.
Read the full article here
Asian shares were mixed overnight, after Wall Street retreated, as investors were rattled by uncertainties brought by US president Donald Trump.
The Nikkei (^N225) fell 0.2% on the day in Japan as the markets reopened after a holiday on Thursday. Japan reported its core inflation rate fell less than forecast, partly boosted by a surge in rice prices due to a shortage of supplies.
The Hang Seng (^HSI) slumped 2.2% in Hong Kong and the Shanghai Composite (000001.SS) was 1.3% down by the end of the session, declining for a second day after China kept its key lending rates unchanged.
Traders have been unloading technology shares following recent gains.
Across the pond on Wall Street, the Dow Jones (^DJI) was almost flat, closing at 41,953.32, the S&P 500 (^GSPC) fell 0.2% ending at 5,662.89, and the Nasdaq (^IXIC) fell 0.3% to finish at 17,691.63.
In the bond market, the yield on benchmark 10-year US Treasury notes fell to 4.237%, from 4.256% late on Wednesday.
Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what's moving markets, and all that's happening across the global economy.
Here's a quick look at what's on the agenda for today:
12:01am: GFK Consumer Confidence
7am: Trading updates: JD Wetherspoon, Coca-Cola Euro, Ceres Power
7am: UK Public Sector Net Borrowing
10:30am: Russian interest rate decision
2pm: US Existing Home Sales
3pm: Eurozone consumer confidence (preliminary) for March
3pm: EU Consumer Confidence