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You can find the current article at its original source at https://www.theguardian.com/business/live/2016/dec/21/uk-public-finances-deficit-brexit-stock-markets-dow-business-live
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| UK runs up £12.6bn deficit in November – business live | UK runs up £12.6bn deficit in November – business live |
| (35 minutes later) | |
| 10.28am GMT | |
| 10:28 | |
| Public finances provide reassurance to chancellor Hammond | |
| Chancellor Philip Hammond may find some Christmas cheer in today’s public finances. | |
| Even though the deficit was higher than expected, Britain seems to be on track to hit the (new) budget targets which were announced in November’s autumn statement. | |
| Howard Archer of IHS Global Insight says its “welcome news” for Hammond. | |
| Reassuring news for the Chancellor as the public finances saw modest improvement in November compared to a year earlier – thereby keeping the government on track to meet – or even slightly undershoot - its upwardly revised target for 2016/17 contained in November’s Autumn Statement. | |
| It would have been somewhat embarrassing if the first set of public finance figures after the November Statement had immediately put question markets over his new fiscal targets. | |
| Howard has also crunched through today’s data, and reports that: | |
| There was a slowdown in growth in tax receipts in November, primarily due to income tax related receipts dipping 1.1% year-on-year. ONS data show that employment growth has slowed recently, although it needs to be borne in mind that the tax data can be erratic from month to month, partly depending on when exactly the receipts come in. It is also notable that national insurance contributions were up 6.3% year-on-year. | |
| VAT receipts were up 4.4% year-on-year in November and corporation tax receipts were up 22.9% year-on-year, which points to still resilient economic activity. | |
| 10.04am GMT | 10.04am GMT |
| 10:04 | 10:04 |
| UK public finances: What the experts say | UK public finances: What the experts say |
| City experts aren’t impressed that Britain’s net borrowing spiked to £12.6bn last month, up from just £4.2bn in October. | City experts aren’t impressed that Britain’s net borrowing spiked to £12.6bn last month, up from just £4.2bn in October. |
| Paul Sirani, chief market analyst at Xtrade, says: | Paul Sirani, chief market analyst at Xtrade, says: |
| “The outlook for the UK heading into the new year is a rather bearish one and investors are unlikely to be flying in with both feet as uncertainty continues to swirl. | “The outlook for the UK heading into the new year is a rather bearish one and investors are unlikely to be flying in with both feet as uncertainty continues to swirl. |
| And here’s Dennis de Jong, managing director at UFX.com, | And here’s Dennis de Jong, managing director at UFX.com, |
| “The gap between UK government spending and income has risen sharply in November, raising a number of red flags with investors who will interpret this as a sign that a significant economic slowdown is coming in the new year. | “The gap between UK government spending and income has risen sharply in November, raising a number of red flags with investors who will interpret this as a sign that a significant economic slowdown is coming in the new year. |
| “Chancellor Philip Hammond has announced the final spring budget for early March where he will attempt to plan for an uncertain future, with the triggering of Article 50 set for later that month. | “Chancellor Philip Hammond has announced the final spring budget for early March where he will attempt to plan for an uncertain future, with the triggering of Article 50 set for later that month. |
| “If borrowing levels continues to rise at this rate, Hammond may not have too much room for manoeuvre when setting out his fiscal policy.” | “If borrowing levels continues to rise at this rate, Hammond may not have too much room for manoeuvre when setting out his fiscal policy.” |
| 9.49am GMT | 9.49am GMT |
| 09:49 | 09:49 |
| UK borrowing: the key charts | UK borrowing: the key charts |
| This chart, from today’s public finances, shows how Britain’s national debt hit a new record high in November - up to £1.655bn from £1.641bn in October. | |
| And this chart shows how net borrowing this financial year has fallen by £7.7bn, compared to 2015-2016. | |
| Updated | |
| at 10.11am GMT | |
| 9.34am GMT | 9.34am GMT |
| 09:34 | 09:34 |
| UK borrowed £12.65bn in November | UK borrowed £12.65bn in November |
| Newsflash: Britain borrowed more than £12.6bn to balance the books in November. | Newsflash: Britain borrowed more than £12.6bn to balance the books in November. |
| The public sector net borrowing requirement (excluding the impact of our state-owned banks) came in at £12.647bn. | The public sector net borrowing requirement (excluding the impact of our state-owned banks) came in at £12.647bn. |
| That’s around £400m ahead of City expectations but lower than the £13.2bn borrowed in November 2015. | That’s around £400m ahead of City expectations but lower than the £13.2bn borrowed in November 2015. |
| And it pushes the national debt up to £1.655 trillion, a new record high, equivalent to 84.5% of GDP. | And it pushes the national debt up to £1.655 trillion, a new record high, equivalent to 84.5% of GDP. |
| More to follow... | More to follow... |
| 9.29am GMT | 9.29am GMT |
| 09:29 | 09:29 |
| If the public’s inflation expectations are accurate, then pay packets are going to be eroded by rising prices in the next few years. | If the public’s inflation expectations are accurate, then pay packets are going to be eroded by rising prices in the next few years. |
| This chart from the Resolution Foundation shows how real wages could start falling in 2017, as inflation overtakes nominal pay growth: | This chart from the Resolution Foundation shows how real wages could start falling in 2017, as inflation overtakes nominal pay growth: |
| The historically low inflation that has made pay packets stretch further in recent years is coming to an end in 2017 https://t.co/CMRl8uD0qy pic.twitter.com/2YGbjCMll1 | The historically low inflation that has made pay packets stretch further in recent years is coming to an end in 2017 https://t.co/CMRl8uD0qy pic.twitter.com/2YGbjCMll1 |
| Updated | Updated |
| at 9.29am GMT | at 9.29am GMT |
| 9.22am GMT | 9.22am GMT |
| 09:22 | 09:22 |
| Eek..... | Eek..... |
| *MONTE PASCHI HALTED, LIMIT DOWN AFTER FALLING 17% IN MILAN | *MONTE PASCHI HALTED, LIMIT DOWN AFTER FALLING 17% IN MILAN |
| 9.22am GMT | 9.22am GMT |
| 09:22 | 09:22 |
| Now this is interesting.... three of the six policymakers at Sweden’s Riksbank voted against extending its QE programme by six months. | Now this is interesting.... three of the six policymakers at Sweden’s Riksbank voted against extending its QE programme by six months. |
| One deputy governor wanted a smaller QE boost, while two more opposed any extension. | One deputy governor wanted a smaller QE boost, while two more opposed any extension. |
| That forced governor Stefan Ingves to use his casting vote to get today’s decision through. | That forced governor Stefan Ingves to use his casting vote to get today’s decision through. |
| 9.09am GMT | 9.09am GMT |
| 09:09 | 09:09 |
| Monte dei Paschi shares plunge on liquidity worries | Monte dei Paschi shares plunge on liquidity worries |
| Shares in Italy’s Monte dei Paschi (MPS) have just been temporarily suspended in Milan after plunging over 8%. | Shares in Italy’s Monte dei Paschi (MPS) have just been temporarily suspended in Milan after plunging over 8%. |
| The selloff was triggered, I think, by a Reuters report showing that MPS is burning through its €11bn cash reserves faster than expected. It is now on track to run out of funds in four months time, rather than having almost a year’s worth of liquidity. | The selloff was triggered, I think, by a Reuters report showing that MPS is burning through its €11bn cash reserves faster than expected. It is now on track to run out of funds in four months time, rather than having almost a year’s worth of liquidity. |
| Reuters said: | Reuters said: |
| Monte dei Paschi said it now expected its net liquidity position, currently standing at €10.6bn, to turn negative after four months. On Sunday the bank had forecast that a current net liquidity position, which was of €11bn, would turn negative after 11 months under a number of assumptions. | Monte dei Paschi said it now expected its net liquidity position, currently standing at €10.6bn, to turn negative after four months. On Sunday the bank had forecast that a current net liquidity position, which was of €11bn, would turn negative after 11 months under a number of assumptions. |
| MONTE PASCHI HALTED -8.30% | MONTE PASCHI HALTED -8.30% |
| Meanwhile Monte Paschi shares suspended just above all time lows | Meanwhile Monte Paschi shares suspended just above all time lows |
| Sorry state of affairs is now seeing the light of day #montepaschi. The bank's liquidity position is in dire straits and was known before https://t.co/5RIrmlm3mq | Sorry state of affairs is now seeing the light of day #montepaschi. The bank's liquidity position is in dire straits and was known before https://t.co/5RIrmlm3mq |
| Remember, MPS must find €5bn of fresh capital by the end of this month. | Remember, MPS must find €5bn of fresh capital by the end of this month. |
| Updated | Updated |
| at 9.18am GMT | at 9.18am GMT |
| 8.53am GMT | 8.53am GMT |
| 08:53 | 08:53 |
| Newsflash from Stockholm: Sweden’s central bank has voted to leave interest rates at their current record low of minus 0.5%. | Newsflash from Stockholm: Sweden’s central bank has voted to leave interest rates at their current record low of minus 0.5%. |
| The Riksbank has also extended its asset-purchase scheme by another six months, to maintain its current expansionary monetary policy. | The Riksbank has also extended its asset-purchase scheme by another six months, to maintain its current expansionary monetary policy. |
| Riksbank keeps rates on hold at -0.5% but extends QE for the first 6-months of 2017 | Riksbank keeps rates on hold at -0.5% but extends QE for the first 6-months of 2017 |
| 8.51am GMT | 8.51am GMT |
| 08:51 | 08:51 |
| The pound is dipping in early trading, down 0.25% against the US dollar to $1.2334, and 0.4% against the euro to €1.185. | The pound is dipping in early trading, down 0.25% against the US dollar to $1.2334, and 0.4% against the euro to €1.185. |
| The US dollar itself is edging away from yesterday’s 14-year high, but remains strong -- possibly too strong, given the political uncertainty in America. | The US dollar itself is edging away from yesterday’s 14-year high, but remains strong -- possibly too strong, given the political uncertainty in America. |
| Jeremy Cook of World First says: | Jeremy Cook of World First says: |
| Once again, we have to think that the market is irrationally exuberant heading into the New Year and while the economic side of the new politics is being fully priced in – US and Chinese stimulus – the political side of the economics – policy mistakes and antagonistic trade stances – are not. | Once again, we have to think that the market is irrationally exuberant heading into the New Year and while the economic side of the new politics is being fully priced in – US and Chinese stimulus – the political side of the economics – policy mistakes and antagonistic trade stances – are not. |
| The dollar has made an impressive run but our minds keep circling back to the inauguration of Donald Trump on January 20th as a possible turning point. Markets like to ‘buy the rumour and sell the fact’ and the swelling of asset prices, the dollar and inflation expectations could be a monster version of this trading plan. We cannot be sure until Trump is in the White House and that is in a month’s time. | The dollar has made an impressive run but our minds keep circling back to the inauguration of Donald Trump on January 20th as a possible turning point. Markets like to ‘buy the rumour and sell the fact’ and the swelling of asset prices, the dollar and inflation expectations could be a monster version of this trading plan. We cannot be sure until Trump is in the White House and that is in a month’s time. |
| World First Morning Update December 21st - It's pretty slow out there - https://t.co/gLZtH0u5RZ | World First Morning Update December 21st - It's pretty slow out there - https://t.co/gLZtH0u5RZ |
| 8.40am GMT | 8.40am GMT |
| 08:40 | 08:40 |
| Have City traders clocked off for Christmas already? | Have City traders clocked off for Christmas already? |
| European stock markets have barely shifted in early trading, and are hovering close to their highest level in 11 months. | European stock markets have barely shifted in early trading, and are hovering close to their highest level in 11 months. |
| In London, the FTSE 100 has risen by 4 points, or 0.07%. | In London, the FTSE 100 has risen by 4 points, or 0.07%. |
| 8.16am GMT | 8.16am GMT |
| 08:16 | 08:16 |
| Some breaking news: Britons are expecting inflation to pick up speed over the next few years, according to a new survey. | Some breaking news: Britons are expecting inflation to pick up speed over the next few years, according to a new survey. |
| Reuters has the details: | Reuters has the details: |
| The British public’s long-term expectation for inflation rose to 3% in December, a more than two year high, according to a closely watched survey by polling company YouGov. | The British public’s long-term expectation for inflation rose to 3% in December, a more than two year high, according to a closely watched survey by polling company YouGov. |
| The survey for U.S. bank Citi showed that in December, people on average expected inflation in 5-10 years to reach 3%, the highest level since September 2014 and up from a November forecast of 2.8%. | The survey for U.S. bank Citi showed that in December, people on average expected inflation in 5-10 years to reach 3%, the highest level since September 2014 and up from a November forecast of 2.8%. |
| In the shorter term, respondents to the survey expect inflation in 12 months’ time to be at 2.43% from an earlier forecast of 2.36%. | In the shorter term, respondents to the survey expect inflation in 12 months’ time to be at 2.43% from an earlier forecast of 2.36%. |
| UK households are expecting long-term inflation to average 3%, according to a new poll https://t.co/zQF6KgzeZl pic.twitter.com/4ghLItuPpb | UK households are expecting long-term inflation to average 3%, according to a new poll https://t.co/zQF6KgzeZl pic.twitter.com/4ghLItuPpb |
| Last month, inflation picked up to 1.2% - and economists expect it to keep rising in 2017. | Last month, inflation picked up to 1.2% - and economists expect it to keep rising in 2017. |
| The survey comes after a series of Brexit-inflation stories, including the row between Unilever and Tesco over the price of marmite, and price hikes by US technology firms such as Apple. | The survey comes after a series of Brexit-inflation stories, including the row between Unilever and Tesco over the price of marmite, and price hikes by US technology firms such as Apple. |
| 8.02am GMT | 8.02am GMT |
| 08:02 | 08:02 |
| The Agenda: UK public finances in focus | The 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. |
| Even though its unseasonably mild, this morning’s economic data may send a shiver through the City. | Even though its unseasonably mild, this morning’s economic data may send a shiver through the City. |
| At 9.30am, we find out how much Britain had to borrow last month to balance the gap between government income and spending. It’s likely to show that the deficit widened to £12.2bn in November, up from just £4.8bn in October. | At 9.30am, we find out how much Britain had to borrow last month to balance the gap between government income and spending. It’s likely to show that the deficit widened to £12.2bn in November, up from just £4.8bn in October. |
| A poor reading may reignite concerns over the UK’s public finances as we head towards 2017, and a likely economic slowdown. | A poor reading may reignite concerns over the UK’s public finances as we head towards 2017, and a likely economic slowdown. |
| The data may put a few investors off their mince pies, with analysts at RBC Capital Markets saying: | The data may put a few investors off their mince pies, with analysts at RBC Capital Markets saying: |
| November is traditionally a seasonally difficult month for the public finances, and we see a deficit of £12bn on the public sector net borrowing (ex-banking groups) measure. | November is traditionally a seasonally difficult month for the public finances, and we see a deficit of £12bn on the public sector net borrowing (ex-banking groups) measure. |
| #UK economy today: public finances pic.twitter.com/4NZN1u9Eiz | #UK economy today: public finances pic.twitter.com/4NZN1u9Eiz |
| Also coming up.... | Also coming up.... |
| Italy’s government will be pushing on with a €20bn rescue package for its banks, with time running short. | Italy’s government will be pushing on with a €20bn rescue package for its banks, with time running short. |
| Monti dei Paschi, Italy’s oldest lender, is making a last-ditch attempt to raise €5bn by selling shares to retail investors and investors. But this plan hit another roadblock last night, when the country’s bank rescue fund expressed concerns about a €1.5bn loan that would underpin the deal. | Monti dei Paschi, Italy’s oldest lender, is making a last-ditch attempt to raise €5bn by selling shares to retail investors and investors. But this plan hit another roadblock last night, when the country’s bank rescue fund expressed concerns about a €1.5bn loan that would underpin the deal. |
| If the rescue plan fails, then the Italian state will have to step in. | If the rescue plan fails, then the Italian state will have to step in. |
| European stock markets are expected to dip this morning, after Wall Street hit record highs (again) last night, and the dollar hit a new 14-year high. | European stock markets are expected to dip this morning, after Wall Street hit record highs (again) last night, and the dollar hit a new 14-year high. |
| Our European opening calls:$FTSE 7034 -0.14%$DAX 11453 -0.10%$CAC 4837 -0.27%$IBEX 9391 -0.18%$MIB 19233 -0.07% | Our European opening calls:$FTSE 7034 -0.14%$DAX 11453 -0.10%$CAC 4837 -0.27%$IBEX 9391 -0.18%$MIB 19233 -0.07% |
| #FTSE is called 13 points lower at 7030 pence at the open. | #FTSE is called 13 points lower at 7030 pence at the open. |
| Traders will be watching New York later, to see if the Dow Jones index can hit 20,000 for the first time (it rose to 19,974 yesterday). | Traders will be watching New York later, to see if the Dow Jones index can hit 20,000 for the first time (it rose to 19,974 yesterday). |
| And at 3.30pm GMT, we get a new reading on America’s oil inventories - a good barometer of demand in the energy sector. | And at 3.30pm GMT, we get a new reading on America’s oil inventories - a good barometer of demand in the energy sector. |
| #oil prices nudge higher ahead of today's US crude inventory data. Market expects a draw of +/- 2.5mb. Brent trading @ $55.65 / WTI @ $53.60 | #oil prices nudge higher ahead of today's US crude inventory data. Market expects a draw of +/- 2.5mb. Brent trading @ $55.65 / WTI @ $53.60 |
| Updated | Updated |
| at 8.04am GMT | at 8.04am GMT |