Published: 21 December 2023
By Suzanne Evans, Director, Political Insight
Government borrowing fell in November, but was still higher-than-expected, according to data from the Office for National Statistics (ONS) released this morning. Public sector net borrowing, excluding state-owned banks, totalled £14.3bn last month, while a Reuters poll of economists had predicted it to be £12.9bn. The figure was £900m less than a year earlier, but was the fourth highest total for November since monthly records began in 1993. The rise in spending was attributed by the ONS mainly to increased benefit payments to some households to offset the end of support for energy bills; while government income increased because of rises in VAT and income tax receipts. The ONS also revised its borrowing estimates up for the first eight months of the financial year by £3.7bn in total, meaning borrowing in the financial year to date has now reached £116.4bn, £24.4bn higher than in the April-November 2022. Meanwhile, Public sector net debt, excluding state owned banks, stood at £2.67tn in November, equivalent to 97.5% of GDP, the ONS said.
UK stocks jumped yesterday on the back of the surprise drop in inflation, which heralded the possibility of interest rate cuts early next year. The FTSE 100 had gained 1.02% by close, settling at 7,715.68 points, while the FTSE 250 jumped 1.62% to reach 19,629.09. "The ghost of inflation has been transformed into Father Christmas for UK investors today," said IG chief market analyst Chris Beauchamp.
Business confidence has fallen, according to Lloyds’ Business Barometer, which measured it at just 35% in December, a fall of 7 points, and the largest monthly decline since August last year. In London, the indicator plummeted by 18 points to 38%. Paul Evans, regional director for London at Lloyds Bank Commercial Banking, said “it’s possible that last month’s Autumn Statement didn’t deliver the boost to confidence that the City had hoped for”. However, business confidence is still significantly higher than a year ago, when it stood at just 17%. Lloyds surveyed 1,200 firms for its latest report.
MPs on the Culture, Media and Sport Committee have produced a report calling on the Premier League and other sports’ governing bodies to reduce the amount of gambling adverts in stadiums, so children are not so exposed to it. Citing their findings that nearly 7,000 visible gambling messages were shown during six league matches, and that front-of-shirt gambling branding made up 7% of all gambling branding visible during 10 broadcast matches surveyed, they are recommending the Government go further than the measures proposed in a gambling White Paper produced earlier in the year, and "work with sports governing bodies on cutting the sheer volume of betting adverts people are being exposed to". “While gambling regulation should not overly impinge on the freedom to enjoy what is a problem-free pastime for the majority, more should be done to shield both children and people who have experienced problem gambling from what often seems like a bombardment of advertising branding at football and other sporting events," committee chair Caroline Dinenage said. The report also backed provisions in the gambling White Paper, including developing a system of financial risk checks by gambling operators on customer accounts that lose a certain amount of money within a certain timeframe; and proposals to implement extra online protections for young adults through a lower stake limits and thresholds for triggering financial risk checks.
JCB says it has made a “series of investigations into substance misuse” at its Staffordshire HQ over the past two months and that a “small but significant number of people” have since left the manufacturing company. A message from JCB’s human resources director to UK employees on the matter was seen by the Guardian, which then corresponded with JCB’s lawyers, Schillings. They confirmed the company had for one week employed sniffer dogs at its site and that, subsequently, 22 staff who tested positive for either drugs or alcohol, or refused to take a drugs test, were sacked. 75% of those fired tested positive for cannabis through urine tests, JCB’s statement added, but it did not confirm whether any class A drugs such as cocaine were found in the tests. The Guardian was also told the staff did not hold senior management positions and that a further 11 UK workers have either been sacked or resigned between April and December this year for refusing to take part in drug and alcohol tests or recording a positive test. A spokesman for JCB later told City A.M: “The health and safety of everyone working at JCB is the company’s top priority. The risks posed by substance misuse and alcohol abuse in the workplace can be very serious, and for this reason, JCB has a zero-tolerance approach to the issue.” Around 8,000 staff work in JCB’s UK offices, and its global headcount numbers around 15,000.
Home REIT, the social housing investment fund that has been beset with scandal, is now being sued by shareholders after it revealed its property portfolio is now worth less than half of what it initially paid. The firm, which bought accommodation and then rented it out to charities, housing associations or other community interest companies to support the homeless, sold a further 80 properties at auction two days’ ago for just 33% of their purchase price, on average. The sales, representing 3.6% of its total portfolio, were sold for some £16m in an attempt to cut Home REIT’s debt. Law firm Harcus Parker, which is representing some 250 unnamed Home REIT shareholders, said it has “initiated the formal stages of the claim” against the firm and its former investment manager Alvarium. City AM says it understands that the litigants include some big institutional shareholders. Home REIT has imploded over the past 14 months. In November last year, short seller Viceroy revealed swathes of its portfolio to be uninhabitable; alleged properties had been bought at inflated prices; and that a large number of tenants were failing to pay any rent, among other issues.
East African gold miner Shanta Gold, looks set to be the latest firm to leave the London Stock Exchange, being under offer from the Tanzania-based group, Saturn Resources. The takeover bid for AIM listed Shana is 13.5 per share, which amounts to a £142m valuation. The deal will need 75% shareholder approval to proceed. Gold prices rose to an all-time high of $2,135 two weeks ago and have remained high since.
Warner Bros Discovery and Paramount Global are said in early merger talks to potentially create a $38bn (£30bn) news and entertainment behemoth. Warner Bros. Discovery CEO David Zaslav met with Paramount Global CEO Bob Bakish on Tuesday in New York to discuss a possible merger, news website Axios first reported, citing multiple sources. The deal would bring together two of Hollywood's "Big Five" studios if Warner Bros, which owns the HBO and TV CNN channels teams up with the studio behind the Mission Impossible films and CBS News. Both companies have been looking to reduce costs as they try to minimise huge losses from their video streaming services, Paramount+ and Max, and the suggestion is that a merger could enable them to compete more strongly with rivals Netflix and Disney Plus. Axios quoted one source behind the scenes as saying that executives are confident that the deal would receive regulatory approval, as “Warner Bros. Discovery doesn't own a broadcast network, which would clear an easier path than would a combination with a company like NBC owner Comcast”.
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