The last major economic releases before the Budget today added to pressure on Chancellor Rachel Reeves.
Public sector borrowing topped forecasts and retail sales volumes fell 1.1% as shoppers held back spending ahead of Black Friday.
Meanwhile, households have been dealt a blow through an unexpected increase in the Ofgem energy price cap.
FTSE 100 Live Friday
- Energy price cap rises
- Borrowing above forecast
- Retail sales slump
Market update: FTSE 100 poor run continues, Rolls-Royce down 4%
10:31 , Graeme EvansA poor week for the FTSE 100 index today ended with investors still on the sidelines amid Wall Street weakness and more poor figures from the UK economy.
The top flight lost another 0.6% or 54.45 points to 9473.20, which compares with the peak of 9930 set on Wednesday of last week.
The latest decline followed the S&P 500’s biggest intraday swing since April.
The leading US index initially rose 1.9% on the back of Nvidia results, only to close 1.6% lower amid diminished hopes for a December interest rate cut.
Trading in London wasn’t helped by the latest batch of economic figures, including a fall in the flash PMI reading for November to 50.5 from October’s 52.2.
The pound was lower at $1.305 as the Office for National Statistics said retail sales volumes fell by a bigger-than-expected 1.1% and that October’s public sector borrowing figure was the third highest on record.
Capital Economics said the releases painted a “pretty grim picture” ahead of next week’s Budget. To make matters worse for UK consumers, Ofgem announced an unexpected increase in the energy price cap from January.
In the FTSE 100, Wall Street’s tech jitters meant that Nvidia backer Polar Capital Technology Trust led the fallers board with a fall of 5% or 23.5p to 433.5p.
Investors also dumped Rolls-Royce shares, leaving them 4% or 49p lower at the cheapest price since August at 1030p.
Other defence-focused firms came under pressure as Melrose Industries dropped 22.6p to 584.4p and BAE Systems fell 39.5p to 1715.5p.
Babcock International fell 22p to 1108p, despite reporting strong results that included a 19% rise in half-year operating profit.
On the risers board, Diageo shares rallied by 46p to 1750p while the shares of housebuilders Persimmon and Barratt Redrow improved 2%.
Private sector activity below forecast in November
09:48 , Graeme EvansAn early indicator of the UK economy’s performance in November today pointed to a sharper-than-expected slowdown in private sector activity.
Services weakness contributed to a flash UK PMI output reading of 50.5, which compared with October’s 52.2 and the City’s forecast for a figure of 51.8.
It is broadly consistent with no change in GDP in November and a meagre 0.1% quarterly pace of growth so far in the fourth quarter.
The closely-watched survey by S&P showed an acceleration in job losses and deterioration in business confidence, although average output prices rose at their slowest rate in nearly five years.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said: “Some of this malaise has been blamed on paused spending decisions ahead of the Autumn Budget, but there’s a real chance this pause may turn into a downturn.
“The drop in confidence about the year ahead reflects growing concerns that business conditions will remain tough in the coming months, largely linked to speculation that further demand-dampening measures will be introduced in the Budget.”
FTSE 100 steadies, Games Workshop continues strong run
09:16 , Graeme EvansThe FTSE 100 index has recovered some of this morning’s lost ground to stand 0.4% or 36.58 points lower at 9491.07.
The improvement from the earlier 1% decline reflects an upturn in US futures, with the S&P 500 index seen in positive territory after last night’s 1.6% reverse.
Housebuilders Persimmon and Barratt Redrow are among the London-listed stocks 2% higher, while Diageo shares have lifted 39p to 1743p.
Games Workshop extended its run in record territory by rising another 370p to 18,630p, having jumped 13% in yesterday’s session.
Polar Capital Technology Trust has fallen 4% or 19p to 438p, while Rolls-Royce is down 4% or 41.5p to 1037.5p.
Bitcoin remains under pressure, down more than 3% at $83,603.
FTSE 100 under pressure, Rolls-Royce and NatWest lower
08:24 , Graeme EvansThe FTSE 100 index has fallen 0,8% or 75.69 points to 9451.96, with Burberry and Glencore among a large number of stocks down by 2% or more.
Anglo American shares fell 3% or 94p to 2642p and Rolls-Royce dropped 28.5p to its lowest level since August at 1050.5p.
NatWest shares fell 5.4p to 571,6p, despite the benefit of an upgrade by Deutsche Bank analysts after they lifted their price target to 660p.
Defence-focused Babcock International lost 3% or 32p to 1098p after half-year results showed a 19% rise in underlying profits.
FTSE 100 down 1%, Bitcoin reverse continues
08:03 , Graeme EvansMarkets are under pressure, with leading Asia benchmarks more than 2% lower after the S&P 500 index yesterday posted its biggest intraday swing since April.
The S&P was initially boosted by Nvidia results but lost the initial 1.9% rise as traders digested the impact of September’s jobs report on the interest rate outlook.
The benchmark closed 1.6% lower, while the Vix fear index rose by more than two percentage points to its highest level since April.
Bitcoin fell 4% yesterday to a seven-month low and is down another 3% at $84,000 this morning, representing a slide of more than 30% from its peak in early October.
The FTSE 100 index has opened 1% or 95.27 points lower at 9432.38.
Borrowing and retail figures a “pretty grim picture”
07:36 , Graeme EvansThe last major economic releases before the Budget next Wednesday “paint a pretty grim picture”, according to Capital Economics.
Government borrowing came in higher than expected in October while retail sales fell sharply at the start of the so-called “Golden Quarter”.
The £17.4 billion of public sector net borrowing in October compared with the City’s £15.1 billion forecast. Higher local authority spending and the slow growth of tax receipts were the biggest factors in the overshoot.
The consultancy said: “This only underscores the generally poor fiscal picture facing the Chancellor as she looks set to tighten fiscal policy in the forthcoming Budget, perhaps by £33 billion.”
It said the retail sales decline of 1.1% was not quite as bad as it looks after four consecutive monthly increases and with the Black Friday period still to come.
However, it added: “The risk is that the fourth quarter isn’t a golden one for retailers and that higher taxes in the Budget restrain retail spending over the crucial festive period and going into next year.”
Ofgem energy price cap set to rise
07:20 , Graeme EvansOfgem today announced a 0.2% rise in its the energy price cap for January to March.
For an average household paying by direct debit for gas and electricity, the overall bill will be £1758 per year.
The regulator said wholesale prices, which make up the largest portion of the bill, are currently stable and have fallen by 4% over the past three months.
The price cap also reflects government policy costs and operating costs, including funding the Sizewell C nuclear project.
Public sector borrowing up £9bn year to date
07:12 , Graeme EvansPublic sector borrowing of £17.4 billion today represented the third-highest October figure since monthly records began in 1993, after those of 2024 and 2020.
The reading for last month is £1.8 billion lower than last October’s figure but higher than the consensus forecast of £15.1 billion and the Office for Budget Responsibility’s forecast of £14.4 billion.
Borrowing in the financial year to October was £116.8 billion, up £9 billion or 8.4% on the same seven-month period of 2024 and the second-highest April to October borrowing on record, after that of 2020.
ONS chief economist Grant Fitzner said:“Borrowing this October was down on the same month last year, although it was still the third-highest October figure on record in cash terms.
“While spending on public services and benefits were both up on October last year, this was more than offset by increased receipts from taxes and National Insurance contributions.”
Retail sales volumes fall more than expected
07:07 , Graeme EvansRetail sales volumes fell by a bigger-than-expected 1.1% in October, the Office for National Statistics said today.
The month-on-month decline, which compares with upwardly revised growth of 0.7% in September, is the steepest since May.
City economists had expected a broadly unchanged performance.
ONS chief economist Grant Fitzner said: “Supermarkets, clothing stores and online retailers all saw slower sales, with feedback from some retailers that consumers were waiting for November’s Black Friday deals.”
Consumer confidence weakens ahead of Budget
06:59 , Graeme EvansGfK’s Consumer Confidence Index fell by two points to minus 19 in November, with all five sub-measures from confidence in the general economy to spending expectations lower.
Neil Bellamy, consumer insights director at GfK, said: “This is a bleak set of results as we head towards next week’s Budget.
“A fall across all five measures suggests the public is bracing for difficult news, with little in the current climate to lift expectations.”
FTSE 100 seen 1% lower, Asia markets post big falls
06:55 , Graeme EvansThe FTSE 100 index is set for a return to the red after Wall Street markets closed sharply lower last night.
The S&P 500 index fell 1.6% after it emerged that US economy added a forecast-beating 119,000 jobs in September, dashing hopes for a December interest rate cut.
The Dow Jones Industrial Average lost 0.8% and the Nasdaq Composite shed 2.2%, with Nvidia 3% lower despite Wednesday’s strong results.
The Nikkei 225 and Hang Seng index are down by about 2% while the FTSE 100 index futures are pointing to a fall of about 1% or 90 points.
London’s top flight yesterday ended a five-day losing run with a rise of 20.24 points or 0.2% to 9527.65 but it had been as high as 9593.83.
The Bitcoin price is at a seven-month low near $85,000.
