Public sector pay rises and debt interest costs push up UK government borrowing; Bitcoin nears $100,000 – as it happened

Time to recap.

The UK government borrowed more than expected in October as debt interest payments and public sector pay rises pushed the public finances deeper into the red.

Borrowing rose to £17.4bn last month, the second highest October figure since monthly records began in 1993 and despite a rise in inheritance tax receipts.

City economists had expected a smaller figure, of about £12.3bn for October, after the UK borrowed more than £16bn in September.

The increase piling pressure on Rachel Reeves as she attempts to grow the economy, with economists warning that more tax rises may be needed if the chancellor wants to lift spending in future years.

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After making a run towards the $100,000 mark, bitcoin is now dipping back – it’s currently trading around $96,000, having hit a new all-time high over $98,000 this morning.

Shares in Alphabet, the parent company of Google, are down 6% after the DoJ ordered it to sell its Chrome browser.

After opening higher, shares in Nvidia are now down over 2% despite reporting strong results last night.

Investors at Thames Water, Yorkshire Water, and Dŵr Cymru Welsh Water will be forced to pick up the tab for executive bonuses after the regulator determined that the sector had awarded “undeserved” extra payments, worth £6.8m.

The company that owns Royal Mail is considering job cuts and price rises on stamps and parcels as it blamed the Labour government’s first budget in 14 years for adding £120m to its costs.

Three British mining executives who had been detained by the government of Mali have been released and are “safe and well”, days after agreeing to pay $160m to settle a tax dispute.

The City regulator plans to intervene in the car loan mis-selling scandal, in a move that could give lenders up to a year to respond to the rising number of customer complaints after a shock court ruling.

Mild weather and discounting by rivals hit sales at JD Sports in October, as the trainers and fashion retailer said profits will be at the lower end of expectations.

Shares in Google’s parent company, Alphabet, have dropped over 5% in early New York trading after the US Department of Justice said it should sell Chrome, the world’s most popular web browser.

The DoJ made the call as part of a far-reaching overhaul of Google’s structure and business practices, in a bid to end its monopoly on internet search.

The proposal proposals follow a landmark court ruling in August in which a federal judge ruled that Google maintained an illegal monopoly over search services.

Parliament’s Treasury Committee have added their voice to the chorus of concerns over the quality of the UK’s employment data.

The committee have written to the UK’s national statistician, Sir Ian Diamond, today, to alert him that they have “major concerns” about the UK’s ability to set monetary and fiscal policy appropriately without reliable data about the labour market.

Earlier this week, top Bank of England officials told the committee that the monthly Labour Force Survey (LFS) produced by the Office for National Statistics may not give them a “good read” about what’s happening in the labour market.

The LFS has been hit by a sharp fall in the response rate from participants, which has made it hard for the ONS to deduce what is happening in the UK employment market.

The Committee now want to learn from Diamond…

1. An outline of the problems with the LFS, what steps the ONS is taking to fix them, and when the problems will be fully resolved.

2. Details on the progress made on the ONS’s new Transformed Labour Force Survey (TLFS) and the challenges associated with making it a suitable replacement for the LFS.

3. Why does the UK have a lower response rate to the LFS than other countries have to their equivalent surveys

4. What priority the ONS places on fixing the LFS and launching the TLFS, and how the work has been resourced

Earlier this week, the Resolution Foundation warned that the survey could have “lost” almost a million workers, leading to the ONS painting an “overly pessimistic” picture of the UK labour market since the pandemic.

Over in New York, there’s choppy trading on Wall Street as investors digest last night’s strong results from Nvidia.

After a positive open, the main stock indices have dipped into negative territory, with the Dow Jones industrial average (-0.03%) and the broader S&P 500 (-0.16%) both in the red.

The tech-focused Nasdaq Composite is down 0.35%.

Shares in Nvidia opened 4% higher, but are now up just 1%, after the chip giant beat sales expectations last night by reporting revenues of $35.08bn in the last quarter, up 94% year-on-year.

Profits more than doubled compared with a year ago, as Nvidia benefited from huge demand for its chips to use in AI systems. It also predicted its revenue would increase by 70% in the coming quarter.

Kalyeena Makortoff

Britain’s City regulator plans to intervene in the car loan mis-selling scandal, in a move that could give lenders up to a year to respond to the rising number of customer complaints after a shock court ruling.

The Financial Conduct Authority has been under pressure to take action after a court of appeal ruling in October said it was unlawful for two lenders to have paid a “secret” commission to car dealers without borrowers’ knowledge.

The FCA is proposing to ease the pressure by scrapping an eight-week deadline for lenders to respond to customer complaints. It suggests an extension to 31 May 2025 – when it plans to set out the next steps in its narrower investigation – or 4 December 2025.

Bitcoin is nudging closer to that $100,000 figure.

It has now traded above $98,000 for the first time, hitting a new alltime high of $98,367 a few minutes ago.

Raffi Boyadjian, lead market analyst at XM, says bitcoin’s post-election surge showed “no sign of abating”, adding:

Investors probably see the boost to Bitcoin from a friendlier regulatory environment by the incoming Trump administration as much more of a sure thing than for its rivals.

Manufacturing output volumes across UK factories has been hit by political uncertainty at home, and abroad.

The latest industrial trends survey from the CBI has found that manufacturing output volumes fell in the quarter to November, and at a faster pace than in the three months to October.

The drop is blamed on uncertainty over the UK budget last month, and the US elections, which both weighed on production in the last quarter.

Anxiety over the political situation in Europe, where France held national elections this summer and Germany’s coalition government collapsed earlier this month, also hurt factory orders.

But more happily, manufacturers expecting output volumes to rise modestly in the next quarter, to February.

Ben Jones, CBI lead economist, said:

“Output has underperformed expectations in recent months, with manufacturers pointing to uncertainty around the UK Budget, the US elections and recent political instability in Europe as among the factors leading customers to pause or cancel orders.

“Many firms still need to work through the implications of the Budget for their own plans for pay, hiring and investment, but it’s an encouraging sign that output volumes are expected to return to growth in the quarter ahead, with order books also showing some improvement this month.

The survey, based on the responses of 317 manufacturers, found:

• Output volumes fell in the three months to November, at a faster pace than in the quarter to October (weighted balance of -12%, from -6% in the three months to October). Output is expected to rise in the three months to February (+9%).

• Output decreased in 14 out of 17 sub-sectors in the three months to November, with the fall driven by the chemicals, mechanical engineering and metal products sub-sectors.

• Total order books were reported as below “normal” but improved relative to last month (-19% from -27%). The level of order books remained below the long run average (-13%).

• Export order books were also seen as below “normal” in November to the same extent as last month (-27%). This was also below the long-run average (-18%).

• Expectations for average selling price inflation rose in November (+11% from 0% in October) with the balance standing broadly in line with the long-run average (+7%).

• Stocks of finished goods were seen as more than “adequate” in November (+21% from +17% in October), with the balance the highest since August 2020.