Britain misses 2014 borrowing targets

Britain’s public sector finances have worsened, according to the latest figures released yesterday (21 October) by the Office for National Statistics. Public finance figures for September showed that borrowing shot up in September. The UK borrowed £11.8 billion last month, 15% more than a year ago. Despite the overall economic improvement in the UK, Britain still has to borrow money to balance the books. The worsening of public finances is mainly blamed on weak wage growth and low tax receipts as a result of the Chancellor’s decision to increase the tax free allowance.

After turmoil in the market last week, the focus yesterday was on China’s GDP figures, with investors relieved to see there weren’t any nasty surprises: Q3 GDP figures have expanded at an annual rate of 7.3% beating the forecasted 7.2%. The figures out of China are particularly important as they suggest that the global slowdown feared by many investors may not be as severe.

In other news yesterday, Reuters reported that the ECB is considering buying corporate debt to help stimulate growth and fight deflation as early as December. As the news hit the market, stock rallied and most indices were sharply up.

Today the market will be focusing on the Bank of England minutes in the UK, while in North America the focus will be on the Consumer Price Index.

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