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(Correcting first date for Brent oil price to Tuesday.) Blue chip indices in London, Paris and Frankfurt were a notch higher on Tuesday morning after figures showed UK borrowing figures increased to its highest level in five years; meanwhile small-cap firm Eco Buildings surged as it secured a deal with Chile’s government. The FTSE 100 index opened up 30.60 points, 0.3%, at 9,434.59. The FTSE 250 was up 45.71 points, 0.2%, at 21,914.38, and the AIM All-Share was up 1.82 points, 0.3%, at 772.88. The Cboe UK 100 was up 0.3% at 942.89, the Cboe UK 250 was up 0.2% at 19,080.99, and the Cboe Small Companies was down 0.1% at 17,533.05. Markets started the week positively, lifted by optimism over corporate earnings, signs of a thaw in US-China relations, and hopes that the US government shutdown could soon be resolved. In European equities on Tuesday, the CAC 40 in Paris and the DAX 40 in Frankfurt were both up 0.1% However, the sharp rise in UK government borrowing cast a shadow over the FTSE 100’s otherwise upbeat start to the week. Speculation continues to build ahead of next month’s autumn budget after the Office for National Statistics reported that UK public sector borrowing in September rose to its highest level in five years. The FTSE 100, with its strong international exposure, made cautious gains despite being largely shielded from domestic pressures. The ONS said higher debt interest payments and increased departmental spending weighed on the public finances. Public sector net borrowing, excluding banks, totalled £20.2 billion in September, up £1.6 billion, or 8.6%, from a year earlier. The figure was slightly above the Office for Budget Responsibility’s March forecast of £20.1 billion but just below market consensus of £20.5 billion, according to FXStreet. The government has now borrowed a cumulative £99.8 billion since the start of the financial year. Kathleen Brooks, research director at XTB, said borrowing has ‘soared’ under the current government, delivering another blow to Chancellor Rachel Reeves. Reeves, who pledged last year not to seek further tax rises or borrowing, faces a difficult balancing act. Brooks added: ‘The raw public sector finance data is ugly in the UK, and it is getting uglier. To fix the public finances and get the economy onto a more secure footing, the government needs to employ fiscal consolidation measures.’ James Smith, developed markets economist at ING, said this year’s Autumn Budget ‘could be seismic for UK markets,’ suggesting it may ultimately push gilt yields down rather than up. Sterling was quoted at $1.3395 early Tuesday, lower than $1.3424 at the London equities close on Monday. The euro traded at $1.1632 early Tuesday, lower than $1.1662 late Monday. Against the yen, the dollar was quoted at JP¥151.19, higher versus JP150.52. The pound fell following the borrowing data, while the yen’s moves reflected news that Sanae Takaichi will become Japan’s first female prime minister. ‘Takaichi is expected to cut taxes and boost defence spending. She is also not a fan of interest rate hikes,’ Brooks noted. In Asia on Tuesday, the Nikkei 225 index in Tokyo was up 0.3%. In China, the Shanghai Composite was up 1.4%, while the Hang Seng index in Hong Kong was up 0.7%. The S&P/ASX 200 in Sydney closed up 0.7% In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average and the S&P 500 both up 1.1%, and the Nasdaq Composite up 1.4% The yield on the US 10-year Treasury was quoted at 3.97%, narrowing from 4.00% on Monday. The yield on the US 30-year Treasury stood at 4.59%, unchanged. In London, Segro led the FTSE 100, rising 3.1% after reporting a strong third quarter driven by improving occupier sentiment. The property developer said £22 million of new headline rent was signed in the quarter, taking the total for the year to date to £53 million, its most productive period for pre-lettings since early 2024. Chief Executive David Sleath said the group is seeing ‘momentum building’ across its development programme and highlighted ‘a significant value creation opportunity’ in its growing data centre pipeline. Occupancy stood at 94%, and rent reviews delivered a 37% uplift year to date. Segro expects development capital expenditure of around £400 million for 2025. At the other end of the index, Coca-Cola HBC fell 2.8% after agreeing to acquire a 75% stake in Coca-Cola Beverages Africa from Coca-Cola Co and Gutsche Family Investments for $2.6 billion. The deal will create the world’s second-largest Coca-Cola bottling partner by volume. Completion is targeted by the end of 2026, with a secondary listing planned on the Johannesburg Stock Exchange to strengthen its presence in Africa. The company reiterated its 2025 guidance, expecting organic revenue and Ebit growth at the top end of its respective 6% to 8% and 7% to 11% ranges. In the FTSE 250, Syncona rose 1.1% after confirming it plans to return up to £250 million to shareholders following potential portfolio company sales. The return could take the form of a tender offer, share buyback, or special dividend. Among small caps, Eco Buildings Group surged 76% after securing a €420 million deal with the Chilean government to manufacture and supply 20,000 modular homes under its flagship social housing programme over the next seven years. Gold was quoted at $4,333.00 an ounce early Tuesday, lower than $4,345.43 on Monday. Brent oil was trading at $60.73 a barrel early Tuesday, higher than $60.69 late Monday. Still to come on Tuesday’s economic calendar, Canada releases its consumer price index for the month of September. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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