Yahoo Finance FTSE rises as UK government borrowing hits £22bn record in November
European stock markets pushed higher on Wednesday as UK public sector borrowing hit a record last month.
In London, the FTSE 100 (^FTSE) gained 1.7% by the end of the session, with miners leading some of the gains, while the CAC (^FCHI) rose 2.1% in Paris, and the Frankfurt DAX (^GDAXI) was nearly 1.5% higher.
UK public borrowing rose to its highest figure for November since monthly records began in 1993.
The Treasury borrowed £22bn during the month in a bid to plug the gap between tax receipts and spending, according to the Office for National Statistics (ONS).
This was £13.9bn more than the previous year and was significantly higher than the £13bn expected by economists polled by Reuters.
Total public sector spending came in at £98.9bn in November while day-to-day central government expenditure increased by £13.5bn to £82bn.
Read more: Debt warning for almost 2 million households ahead of Christmas
“Faced with the twin global emergencies of a pandemic and Putin’s war in Ukraine, we have taken significant action to support millions of businesses and families here in the UK,” chancellor Jeremy Hunt said.
“We have a clear plan to help halve inflation next year, but that requires some tough decisions to put our public finances back on a sustainable footing.”
Across the pond on Wall Street, the S&P 500 (^GSPC) rose almost 1.6%, adding to recent gains after the index closed higher for the first time in four sessions on Tuesday. The tech-heavy Nasdaq (^IXIC) rose 1.7%. The Dow Jones (^DJI) edged 1.6% higher by the time of the European close.
It came as US consumer confidence rose more than expected in December as inflation expectations dipped and gas prices cooled.
The closely-watched consumer confidence index climbed to 108.30 this month, markedly higher than the revised 101.4 figure in November, said think tank The Conference Board.
Michael Hewson of CMC Markets said: “After four days of losses US markets just about managed to break their losing streak, with the focus this week very much on Friday’s PCE report and US consumer spending reports for November, which has thus far held up reasonably well this year, despite declining consumer confidence.”
Read more: UK consumer morale sinks close to all-time low
Overnight, stocks in Asia were mixed on closing. In Tokyo, the Nikkei (^N225) fell 0.7% while the Hang Seng (^HSI) climbed 0.3% in Hong Kong, and the Shanghai Composite (000001.SS) ended 0.2% lower.
"High hopes that the easing of China’s COVID restrictions would see a spurt of energy dart through the economy have been dashed, as infection spreads across the vast country and speculation grows about rising fatalities, even though the official death toll remains very low," Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said.
"The about-turn in policy appears to have caught hospitals off-guard and there are concerns that the infrastructure won’t cope with the number of patients expected to flood into hospitals.
"Any significant revival in the country’s economic fortunes won’t materialise until these winter waves of infection have passed, so it’s little surprise Chinese shares look set to end the year sharply lower, with the Shanghai composite down 16% year to date and the Hang Seng in Hong Kong down 17% since the start of 2022."
It comes after the Bank of Japan (BoJ) decided to relax its yield curve control criteria, which makes it much less of a global outlier, and points to the prospect of further tightening in rates heading into 2023.
