Higher than expected borrowing figures have put more pressure on Chancellor Rachel Reeves ahead of next week’s Budget, as stock markets remained nervous over lofty valuations and the strength of economies on both sides of the Atlantic.
The Office for National Statistics (ONS) said public sector borrowing stood at £17.4 billion last month, £1.8 billion lower than a year ago but the third highest level for October since records began in 1993.
The figure was more than the £15 billion expected by most economists and higher than the £14.4 billion forecast in March by the UK’s independent fiscal watchdog, the Office for Budget Responsibility (OBR).
Treasury Chief Secretary James Murray said next week’s Budget would set out how Ms Reeves intends to “cut debt”.
He said: “Currently, we spend £1 in every £10 of taxpayer money on the interest of our national debt. That money should be going to our schools, hospitals, police and armed forces.
“That is why we are set to deliver the largest primary deficit reduction in both the G7 and G20 over the next five years – to get borrowing costs down.”
Shadow chancellor Sir Mel Stride said Labour should focus on cutting spending to avoid tax rises in the Budget.
“If Labour had any backbone, they would control spending to avoid tax rises next week.”
Share prices slumped in early trade following heavy losses on Wall Street on Thursday, as worries about AI valuations and US growth rattled markets
However, after falling sharply in early trade the FTSE 100 closed 12.06 points higher at 9,539.71, following a positive opening on Wall Street as traders weighed whether the slide still had further to run.
Sentiment improved after New York Fed president John Williams said he sees room for an interest rate cut in the near term. Traders priced in a 75% chance of another move, up from around 40% on Thursday.
Just ahead of the US close, the Nasdaq was up 1.5%, the S&P 500 was 1.4% higher and the Dow Jones gained 1.4%.
source