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UK public finances to give final economic healthcheck ahead of autumn statement – business live UK public finances beat forecasts in October, but deficit still off track – business live
(35 minutes later)
9.42am GMT
09:42
Here’s some instant reaction to October’s public finances:
Modest boost for Chancellor ahead of Wed's #AutumnStatement as #UK public finances see y/y in Oct. PSNBex at £4.8n (£6.4bn in Oct 2015)
The better UK Public Finances in October were driven by a £1.7 billion rise in Corporation Tax receipts
9.36am GMT
09:36
UK public finances better than expected (but still weak).
Here we go! Britain borrowed less than feared last month, but is still on track to breach this year’s deficit target.
Britain borrowed £4.796bn in October, the ONS says. That’s down from £6.4bn in October 2015.
That is rather better than the £6bn which the City expected [this excludes the impact of the taxpayers’ stakes in the banking sector].
It means that Britain has now borrowed £48.6bn since April 2016 - down from £54.2bn in April-October 2015.
So the deficit has dropped by £5.6bn so far this year, which means Britain is probably missing the government’s target of a £55bn deficit for this financial year.
This chart shows how much Britain has borrowed this year (the final orange line), and the final target for borrowing this financial year (the blue blob).
More to follow!
Updated
at 9.46am GMT
9.25am GMT
09:25
The latest UK Public Finances data are due at 9:30 am #AutumnStatement
9.19am GMT9.19am GMT
09:1909:19
The weakness of the French economy continues to hurt Kingfisher.The weakness of the French economy continues to hurt Kingfisher.
The DIY chain has reported a 3.6% slide in like-for-like sales during the last quarter in France, where it runs the Castorama and Brico Dépôt chains.The DIY chain has reported a 3.6% slide in like-for-like sales during the last quarter in France, where it runs the Castorama and Brico Dépôt chains.
That took the shine off a 5.8% jump in comparable sales in the UK, led by its Screwfix arm.That took the shine off a 5.8% jump in comparable sales in the UK, led by its Screwfix arm.
Kingfisher CEO Véronique Laury is trying to turn things around with a new efficiency plan. But the City isn’t impressed, sending Kingfisher’s shares down 2%.Kingfisher CEO Véronique Laury is trying to turn things around with a new efficiency plan. But the City isn’t impressed, sending Kingfisher’s shares down 2%.
George Salmon, Equity Analyst at Hargreaves Lansdown, fears that Laury will struggle:George Salmon, Equity Analyst at Hargreaves Lansdown, fears that Laury will struggle:
Previous Kingfisher bosses have tried and failed with similar plans, and just now trading conditions look challenging.Previous Kingfisher bosses have tried and failed with similar plans, and just now trading conditions look challenging.
UK builders merchants have reported tougher conditions, and the French economic outlook is uncertain.”UK builders merchants have reported tougher conditions, and the French economic outlook is uncertain.”
9.00am GMT9.00am GMT
09:0009:00
Britain’s vote to leave the EU destroyed $1.5trillion of wealth and cut the number of dollar millionaires in the UK by 15%.Britain’s vote to leave the EU destroyed $1.5trillion of wealth and cut the number of dollar millionaires in the UK by 15%.
That’s according to Credit Suisse’s latest wealth report, which highlights the impact of the 16% tumble in the value of the pound since JuneThat’s according to Credit Suisse’s latest wealth report, which highlights the impact of the 16% tumble in the value of the pound since June
Michael O’Sullivan, chief investment officer in Credit Suisse’s wealth management arm, explains:Michael O’Sullivan, chief investment officer in Credit Suisse’s wealth management arm, explains:
“The impact of the Brexit vote is widely thought of in terms of GDP but the impact on household wealth bears watching.“The impact of the Brexit vote is widely thought of in terms of GDP but the impact on household wealth bears watching.
“Since the Brexit vote, UK household wealth has fallen by $1.5tn. Wealth per adult has already dropped by $33,000 to $289,000 since the end of June. In fact, in US dollar terms, 406,000 people in the UK are no longer millionaires.”“Since the Brexit vote, UK household wealth has fallen by $1.5tn. Wealth per adult has already dropped by $33,000 to $289,000 since the end of June. In fact, in US dollar terms, 406,000 people in the UK are no longer millionaires.”
The report also found that the richest % of people across the globe still own more wealth than the rest of the world put together - prompting development charity Oxfam to push the government to help the poorest in society.The report also found that the richest % of people across the globe still own more wealth than the rest of the world put together - prompting development charity Oxfam to push the government to help the poorest in society.
Here’s the full story:Here’s the full story:
8.42am GMT8.42am GMT
08:4208:42
Kit Juckes of French bank Societe Generale also expects that today’s public finances will show there’s been little progress in eliminating the deficit this year.Kit Juckes of French bank Societe Generale also expects that today’s public finances will show there’s been little progress in eliminating the deficit this year.
We look for a deficit excluding public sector banks of £6bn, a small fall from a year ago and a cumulative fall of just £2.3bn for the first seven months of the fiscal year compared to 2015/2016.We look for a deficit excluding public sector banks of £6bn, a small fall from a year ago and a cumulative fall of just £2.3bn for the first seven months of the fiscal year compared to 2015/2016.
This pace of improvement in the trend in public finances is disappointing relative to the resilience of the economy this year and limits the scope for any fiscal largesse going forwards.This pace of improvement in the trend in public finances is disappointing relative to the resilience of the economy this year and limits the scope for any fiscal largesse going forwards.
8.20am GMT8.20am GMT
08:2008:20
Stock markets rally in early tradingStock markets rally in early trading
European stock markets have jumped at the start of trading, after the US market hit fresh record highs last night.European stock markets have jumped at the start of trading, after the US market hit fresh record highs last night.
In London the FTSE 100 index has risen by 50 points to 6828, up 0.75%. Mining stocks are leading, with Anglo American gaining 4.9% and BHP Billiton up 3.8%.In London the FTSE 100 index has risen by 50 points to 6828, up 0.75%. Mining stocks are leading, with Anglo American gaining 4.9% and BHP Billiton up 3.8%.
Germany’s DAX and France’s CAC indices are both up around 0.6%, as investors catch up with a strong rally on Wall Street on Monday that drove all four indices to record levels.Germany’s DAX and France’s CAC indices are both up around 0.6%, as investors catch up with a strong rally on Wall Street on Monday that drove all four indices to record levels.
All four of the main US stock market indices - S&P 500, Nasdaq, Dow Jones and Russell 2000 - hit new record highs today. #timestampAll four of the main US stock market indices - S&P 500, Nasdaq, Dow Jones and Russell 2000 - hit new record highs today. #timestamp
The prospect of a new splurge of US government spending is pushing shares higher, says FXTM Chief Market Strategist Hussein Sayed.The prospect of a new splurge of US government spending is pushing shares higher, says FXTM Chief Market Strategist Hussein Sayed.
There are clearly no signs of profit taking yet, with Donald Trump’s reflationary economic plans of cutting taxes, infrastructure spending and less regulations remain to be the number one reason fueling stocks’ gains.There are clearly no signs of profit taking yet, with Donald Trump’s reflationary economic plans of cutting taxes, infrastructure spending and less regulations remain to be the number one reason fueling stocks’ gains.
So much for those analysts who predicted a market crash if Trump became president.So much for those analysts who predicted a market crash if Trump became president.
Even the news that Trump is now moonlighting as Nigel Farage’s career advisor hasn’t ended the rally.....Even the news that Trump is now moonlighting as Nigel Farage’s career advisor hasn’t ended the rally.....
2️⃣ We regret to inform you that the president-elect of the US has been tweeting again https://t.co/LsxUfLwojl pic.twitter.com/trdT6sdqWh2️⃣ We regret to inform you that the president-elect of the US has been tweeting again https://t.co/LsxUfLwojl pic.twitter.com/trdT6sdqWh
PM's spokesman says there is no vacancy for an ambassador to U.S. after Donald Trump tweeted that UKIP's Nigel Farage "would do a great job"PM's spokesman says there is no vacancy for an ambassador to U.S. after Donald Trump tweeted that UKIP's Nigel Farage "would do a great job"
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at 8.25am GMTat 8.25am GMT
7.56am GMT7.56am GMT
07:5607:56
The agenda: UK public finances in focusThe agenda: UK public finances in focus
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
With Britain’s autumn statement due tomorrow, investors will be particularly interested in today’s main event -- the UK public finances for October.With Britain’s autumn statement due tomorrow, investors will be particularly interested in today’s main event -- the UK public finances for October.
Economists predict that Britain had to borrow around £6bn to balance the books last month, down from £6.4bn in October 2015.Economists predict that Britain had to borrow around £6bn to balance the books last month, down from £6.4bn in October 2015.
Any reduction in the nation’s deficit is welcome, but this fall wouldn’t bring the public finances back into line, given disappointing figures earlier in the financial year.Any reduction in the nation’s deficit is welcome, but this fall wouldn’t bring the public finances back into line, given disappointing figures earlier in the financial year.
Since April, Britain has already borrowed £45.5bn -- just £2.3bn less than a year earlier.Since April, Britain has already borrowed £45.5bn -- just £2.3bn less than a year earlier.
That means there’s very little chance of hitting the old target of £55bn for the 2016-17 financial year, as this chart shows:That means there’s very little chance of hitting the old target of £55bn for the 2016-17 financial year, as this chart shows:
September’s public finances were a particular shocker, as Howard Archer of IHS Global Insight reminds us:September’s public finances were a particular shocker, as Howard Archer of IHS Global Insight reminds us:
The public finances worsened appreciably in September compared to a year earlier.The public finances worsened appreciably in September compared to a year earlier.
Specifically, Public Sector Net Borrowing excluding banks (PSNBex) amounted to £10.6 billion in September, which was up from a shortfall of £9.3 billion in September 2015.Specifically, Public Sector Net Borrowing excluding banks (PSNBex) amounted to £10.6 billion in September, which was up from a shortfall of £9.3 billion in September 2015.
While the economy has shown overall resilience following June’s Brexit vote, tax receipts have taken some hit. Indeed, corporation tax fell year-on-year in September.While the economy has shown overall resilience following June’s Brexit vote, tax receipts have taken some hit. Indeed, corporation tax fell year-on-year in September.
Chancellor Philip Hammond is already expected to tell MPs tomorrow that UK growth forecasts have been revised down, meaning Britain will borrow tens of billions of pounds more than expected over the next few years.Chancellor Philip Hammond is already expected to tell MPs tomorrow that UK growth forecasts have been revised down, meaning Britain will borrow tens of billions of pounds more than expected over the next few years.
Fiona Cincotta of City Index believes this bad news could easily drive up Britain’s borrowing costs in the financial markets.Fiona Cincotta of City Index believes this bad news could easily drive up Britain’s borrowing costs in the financial markets.
In order to shore up the economy the government is expected to increase its borrowing, with upward revisions to net borrowing figures ranging from £8 billion to an extra £18 billion for 2017-18, taking the total to somewhere in the region of £63.5 billion - £73.5 billion. Should this amount be added to gilt issuance it would represent a significant increase which we would then expect to increase the UK’s rate at which it borrows.In order to shore up the economy the government is expected to increase its borrowing, with upward revisions to net borrowing figures ranging from £8 billion to an extra £18 billion for 2017-18, taking the total to somewhere in the region of £63.5 billion - £73.5 billion. Should this amount be added to gilt issuance it would represent a significant increase which we would then expect to increase the UK’s rate at which it borrows.
Therefore, any significantly large increase in future borrowing tomorrow from Hammond in his Autumn Statement, is likely to send the yields higher.Therefore, any significantly large increase in future borrowing tomorrow from Hammond in his Autumn Statement, is likely to send the yields higher.
[yields rise when prices fall, and show the effective interest rate on a bond][yields rise when prices fall, and show the effective interest rate on a bond]
Also coming up....Also coming up....
The economics calendar is a little sparse, but we do get a new measure of eurozone consumer confidence and US home sales (both at 3pm GMT)The economics calendar is a little sparse, but we do get a new measure of eurozone consumer confidence and US home sales (both at 3pm GMT)
Economists will be digesting the news that Donald Trump will pull America out of the Trans-Pacific Partnership on his first day as president.Economists will be digesting the news that Donald Trump will pull America out of the Trans-Pacific Partnership on his first day as president.
That won’t calm fears that we’re heading into choppy waters of trade wars and protectionism.That won’t calm fears that we’re heading into choppy waters of trade wars and protectionism.
And in the City, food group Compass, retail chain Kingfisher, online electrical retailer AO World, pub chain Mitchells & Butler and bank note maker De La Rue are all reporting results.And in the City, food group Compass, retail chain Kingfisher, online electrical retailer AO World, pub chain Mitchells & Butler and bank note maker De La Rue are all reporting results.
UpdatedUpdated
at 8.30am GMTat 8.30am GMT