London open: Stocks nudge up after borrowing figures; Fed minutes eyed

London stocks nudged higher in early trade on Wednesday as investors mulled UK borrowing figures and looked ahead to the release of the latest Federal Reserve minutes.

At 0840 BST, the FTSE 100 was up 0.1% at 8,279.61.

Figures released earlier by the Office for National Statistics showed that government borrowing was higher than expected in July.

Borrowing came in at £3.1bn, up £1.8bn on July 2023 and £100m higher than the Office for Budget Responsibility was expecting. It was also above the £2.5bn expected by economists and marked the highest borrowing figure for July since 2021.

Cumulative borrowing in the first four months of the fiscal year was £51.4bn. This was £500m less than in the same period a year earlier, but £4.7bn more than the OBR had forecast in March.

Jessica Barnaby, deputy director for public sector finances at the ONS, said: "Revenue was up on last year, with income tax receipts in particular growing strongly.

"However, this was more than offset by a rise in central government spending where, despite a reduction in debt interest, the cost of public services and benefits continued to increase."

Alex Kerr, UK economist at Capital Economics, said: "Overall, today’s release highlights the tight fiscal backdrop that the Chancellor faces ahead of her first Budget on 30th October. We still think that she will look to raise an additional £10bn a year via higher taxes in the Budget and increase borrowing by around £7bn a year."

Looking ahead to the rest of the day, the Fed minutes are due after the close of UK markets at 1900 BST.

Richard Hunter, head of markets at Interactive Investor, said: "Investors will be looking for reassurance that the Fed is still on track and has not fallen behind the curve in cutting rates too late to avoid the economy entering recessionary territory."

In equity markets, heavily-weighted miners were the top gainers on the FTSE 100, with Anglo American, Rio Tinto, Antofagasta and Glencore all up.

Public bus operator Mobico surged as it held annual guidance after a jump in adjusted interim operating profit driven by positive demand and cost cuts.

Profit for the six months to June 30 rose 23.8% to £71.2m while on a pre-tax basis the company narrowed losses to £1.5m from £52m a year earlier. No dividend was declared as the group, formerly known as National Express, continues to deleverage.

It still expects adjusted operating profit for 2024 to be within the range of £185m to £205m.

Elsewhere, Barratt and Redrow were in focus again as their merger came one step closer to regulatory approval after the Competition and Markets Authority said the allowances made by the companies may just be enough to get the green light.

Market Movers

FTSE 100 (UKX) 8,279.61 0.08%
FTSE 250 (MCX) 21,028.17 0.20%
techMARK (TASX) 4,859.31 -0.14%

FTSE 100 - Risers

Anglo American (AAL) 2,284.50p 1.80%
Rio Tinto (RIO) 4,859.00p 1.72%
Antofagasta (ANTO) 1,910.00p 1.57%
Glencore (GLEN) 416.20p 1.46%
Entain (ENT) 644.60p 1.45%
Fresnillo (FRES) 555.00p 1.37%
Rentokil Initial (RTO) 485.00p 0.98%
Melrose Industries (MRO) 502.20p 0.92%
Airtel Africa (AAF) 111.40p 0.91%
Pershing Square Holdings Ltd NPV (PSH) 3,600.00p 0.67%

FTSE 100 - Fallers

Flutter Entertainment (DI) (FLTR) 15,750.00p -0.97%
Severn Trent (SVT) 2,514.00p -0.71%
BT Group (BT.A) 135.35p -0.70%
Vodafone Group (VOD) 73.44p -0.60%
Kingfisher (KGF) 277.90p -0.43%
Convatec Group (CTEC) 233.20p -0.43%
Shell (SHEL) 2,721.50p -0.42%
Rightmove (RMV) 537.60p -0.41%
Hikma Pharmaceuticals (HIK) 2,024.00p -0.39%
Taylor Wimpey (TW.) 164.90p -0.39%

FTSE 250 - Risers

Ninety One (N91) 172.90p 4.72%
Savills (SVS) 1,212.00p 3.24%
Elementis (ELM) 162.20p 2.92%
Renewi (RWI) 680.00p 2.87%
NCC Group (NCC) 159.80p 2.83%
Softcat (SCT) 1,654.00p 2.80%
Discoverie Group (DSCV) 649.00p 2.53%
Tritax Eurobox (GBP) (EBOX) 67.00p 2.29%
Ithaca Energy (ITH) 132.40p 2.16%
PureTech Health (PRTC) 169.80p 1.80%

FTSE 250 - Fallers

Baltic Classifieds Group (BCG) 262.00p -3.14%
Ashmore Group (ASHM) 167.50p -2.45%
Syncona Limited NPV (SYNC) 120.00p -2.28%
Volution Group (FAN) 510.00p -2.11%
W.A.G Payment Solutions (WPS) 65.00p -1.81%
TBC Bank Group (TBCG) 3,000.00p -1.48%
Safestore Holdings (SAFE) 843.50p -1.23%
Pacific Horizon Inv Trust (PHI) 597.00p -1.16%
HICL Infrastructure (HICL) 127.80p -1.08%
Chemring Group (CHG) 400.00p -0.99%