UK government borrows a record £22bn for the month of November amid energy crisis – Business Live | a job

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The UK’s first satellite launch is a small step closer as Virgin Galactic’s converted Boeing 747, Cosmic Girl, takes its LauncherOne rocket into the air for the first time during a drop test in July 2019. Photograph: Virgin Orbit/AFP/Getty Images

The prospect of a ‘historic’ space flight from Cornwall early in the new year has taken a huge step forward after Britain’s Civil Aviation Authority issued a launch license for the project.

Virgin Orbit will begin final preparations to launch the first satellites from UK soil, although no firm launch date has been set.

There was growing frustration within the project that the licensing process was delaying the long-awaited launch. But the Civil Aviation Authority said on Wednesday that Virgin Orbit had demonstrated that it had taken “all reasonable steps” to ensure the launch was as safe as possible and that it met “appropriate security and environmental” requirements.

A repurposed Virgin Atlantic Boeing 747 called Cosmic Girl, fitted with a rocket propelling nine satellites into orbit, has been waiting at Spaceport Cornwall for the go-ahead from the regulator since October.

You can read the full report here:

The FTSE 100 has now gained a few more points, and is up 0.4% today, at 7,401.

Today’s leaders include coach retailers JD Sports and Frasers, the artist formerly known as Sports Direct. JD Sports gained 6.7%, while Frasers stock rose 3%.

They benefited from reading across American trainer brand Nike, which reported increased sales overnight.

Nike stock (NKE dollars) rose following earnings and earnings forecasts. +12%+

Inventory decreased from the previous quarter.

Nike Direct sales increased 16% for the second quarter to $5.4 billion and digital sales increased 25%.

“The company has already passed its inventory peak,” said John Donahue, CEO of Nike. pic.twitter.com/FvPjj0Nd0G

— Matt Halfhill (@MattHalfhill) December 20, 2022

Victoria Scholar, Chief Investment Officer at Interactive Investor, a platform, said:

Although the environment is challenging with pressures from rising inventory levels, supply chain issues, consumer slowdowns and cost inflation, Nike has proven the sheer strength of its brand and the strength of its product line to be resilient in the face of the adverse macroeconomic challenges plaguing U.S. retail this year. general.

Nike offers attractive discounts to entice customers and reduce inventory, but those price cuts take a toll on margins. It is also struggling in China, its third largest sales market.

Shares in Nike have had a tough time this year, plunging 37% before the post-hours jump amid a tough backdrop for stocks and consumers.

TWITTER UPDATE: Elon Musk has confirmed that he will be looking for a replacement as his boss. Elon Musk arrives at the Met Gala at New York’s Metropolitan Museum of Art in May. Photograph: Andrew Kelly/Reuters

For anyone who didn’t keep up with the news overnight, there’s been a major twist in the Twitter saga: Elon Musk has confirmed that he’ll be stepping down as CEO, once he finds an actual replacement.

“I will resign as CEO as soon as I find someone stupid enough to take the job! After that, I will run the software and server teams,” Musk tweeted.

I will resign as CEO as soon as I find someone stupid enough to take the job! After that, I’ll just run the software and server teams.

– Elon Musk (@elonmusk) December 21, 2022

Josh Taylor of The Guardian wrote:

This is the first time Musk has mentioned leaving his post as head of the social media platform, since Twitter users voted decisively in a poll for him to step down, which the billionaire called Sunday night.

This isn’t the first time he’s said he won’t run the company long-term. In November, the world’s second richest person told a Delaware court that he would cut back on his time on Twitter and eventually find someone to run it in his place.

Calls for Wall Street to fire Musk have been growing for weeks, and more recently Tesla investors have wondered if his focus on the social media platform is distracting him from properly steering the electric car business.

Musk admitted at a Delaware court hearing that he had a lot of the stuff on his plate. He said Sunday, however, that there is no successor and that “no one wants the job that can really keep Twitter alive.”

You can read the full report here:

The Office for National Statistics said its figure for the cost of subsidizing energy bills to households and businesses was a “preliminary indicative estimate,” so there could be significant revisions in the data in the coming months, notes Martin Beck, chief economic adviser to the EY ITEM Club. , an economic forecaster.

He said the November record was “largely due to the cost of government energy subsidy programmes”.

Beck said the figures so far suggested borrowing could actually be lower than the Balance Sheet Office’s full-year forecast of £177bn. But he added:

It is almost impossible to be confident of this, given the uncertainty about the future course of energy prices – and thus the cost of an energy price guarantee – and the lack of monthly budget forecasts against which to measure.

An increase in the energy price guarantee by £500 from next April and the government’s decision not to continue universal subsidies to households and businesses means the cost of energy subsidy schemes should be much lower in the 2023-24 financial year. Therefore, the EY ITEM club expects that after the current fiscal year, public sector borrowing should decline steadily.

Jeremy Hunt has a lot of important public finance decisions ahead, says the Institute of Chartered Accounts (ICAEW). Not least: what will happen to corporate support after April?

Alison Ring, Director of Public Sector and Tax at ICAEW, also raised concerns about lower investment in the year so far compared to 2021. The ONS said net investment in the first 11 months of 2022 was £34.4 billion, £1 billion less. for the previous year. .

She said:

Chancellor Jeremy Hunt will be relieved that the deficit for the year to date is just under £100 billion by £5 billion, on course to stay within the Office of Budget Responsibility’s latest forecast of £177 billion for the full year.

The continued slowdown in public capital investment is worrisome given its importance to prospects for economic growth and future tax revenues, as well as continued disruption from industrial work.

We are pleased that the Chancellor has announced the Spring Budget and accompanying Independent Financial Projections on 15 March 2023, as this will be the first official budget for 18 months. However, it is important for the UK Treasury to set out the terms of the energy bill scheme extension from April 2023 as early as possible, because waiting until March could be too late for many companies trying to see if they are applicable in 2023.

UK government borrowing of £22bn in November was significantly higher than the £13bn expected by economists polled by Reuters.

There are many policy decisions all working together to drive borrowing, said Samuel Tombs, chief UK economist at consultancy Pantheon Macroeconomics.

Public borrowing was boosted in November by government interventions in energy and the cost of living, the decision to reverse the National Insurance hike in April, and higher inflation.

The energy bills subsidy scheme cost the government £1.9bn in November, while the energy price guarantee was the main driver of the £4.7bn increase in subsidies year on year. In addition, social assistance payments were £3.3 billion higher than they were a year earlier, reflecting the payment of the second cost of living grants for working-age benefit recipients.

Divya Sridhar, an economist at PwC, an accounting firm, said:

Looking ahead, continued subsidies for energy bills and the ninth consecutive hike in interest rates announced by the Bank of England last week will continue to put pressure on public finances. The Office for Budget Responsibility (OBR) revised its borrowing forecasts up by £64.2 billion in the 2022-23 financial year and by £39.8 billion in 2023-24 from their view of the first quarter of 2022.

In the medium term, as the economy recovers and taxes rise, the Office for Budget Responsibility expects net government debt as a proportion of GDP to remain close to 100% of GDP through 2025-26 before it begins to decline.

Updated at 08.36 GMT

More on fiscals soon, but it looks like a rather nice open in European stock markets today.

Trading is usually relatively weak in the days leading up to Christmas for obvious reasons. Opening bids pushed the FTSE 100 up 0.2%.

Here are the opening stills from the European market, via Reuters:

Europe STOXX 600.STOXX up 0.3%

40 CAC France up 0.2%, IBEX Spain up 0.4%

EURO STOXX Index Up 0.2%, Eurozone Blue Chips Up 0.2%

Germany’s DAX rose 0.4%.

Chancellor Jeremy Hunt is leaving 11 Downing Street in November. Photo: Kin Cheung/AP

Jeremy Hunt, the chancellor, reiterated his position that the UK faced “difficult decisions” to reduce government borrowing.

The prospect of increased borrowing (via large but unspecified tax cuts) was a major factor in the swift removal of Liz Truss and Kwasi Quarting as Prime Minister and Finance Minister in October after less than two months. Hunt was brought in to stabilize the ship – a task he said would require a deficit reduction program to rival the early years of a Conservative government.

Hunt said on Wednesday:

In the face of the dual global emergencies of the pandemic and Putin’s war in Ukraine, we have taken important action to support millions of businesses and families here in the UK.

We have a clear plan to help cut inflation in half next year, but this will require some tough decisions to get our public finances back on a sustainable footing.

UK government borrows £22 billion in November

Good morning, and welcome to our live, renewed coverage of business, the economy, and the financial markets.

The UK government borrowed £22 billion in November, a record amount for the month amid giant energy price subsidy schemes for homes and businesses across the country.

The Office for National Statistics (ONS) said borrowing in November was £13.9bn more than in the same month in 2021, the highest borrowing in November since monthly records began in 1993.

Government energy price guarantees for households and equivalent subsidies for businesses are expensive interventions, requiring months of massive borrowing. Energy prices rose very sharply during 2022 due to the Russian invasion of Ukraine, and the resulting disruption to global energy supplies.

Public sector net borrowing (excluding banks bailed out during the financial crisis) was £105.4bn in the financial year to November 2022, the fourth-highest total since 1993 and £50.8bn higher than in 2019, before That the government releases huge inflows. Spending plans to protect the UK economy during coronavirus lockdowns.

The effects of rising inflation are also becoming more apparent: the UK is borrowing a large amount by issuing index-linked government bonds (UK government bonds, known as linkers, whose payments are linked to the inflation index of retail prices). Rising inflation pushed up these payments to bondholders, so central government debt interest payable was £7.3 billion in November 2022, an increase of £2.4 billion from November 2021, and the highest figure in November ( November) since monthly records began in April 1997.

schedule of work

11am GMT: Retail data from the Confederation of British Industry (CBI) (Dec; Previously: -19 points; Consensus: -23 points)

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