FTSE 100 Live: Borrowing below £13.5bn target, interest bill rising

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Oil Stocks Increase FTSE 100, AO World Jump 13%

Oil stocks have driven the FTSE 100 index into positive territory after gains of at least 3% for Shell, BP and Harbor Energy.

The FTSE 100 index is up 43.38 points at 7,420.23, with mining companies Rio Tinto and Anglo American also providing support.

The UK-focused FTSE 250 index reversed 45.39 points to 19,367.96, although there was a strong session for utility warehouse company Telecom Plus after the interim results.

Shares rose 60p to 2395p as co-chief executive Andrew Lindsay said the company was growing faster than ever at a 24% annual rate.

Online electrical retailer AO World enjoyed a strong session in the FTSE All-Share after reporting progress on its plan to focus the company on profit and cash generation

Full-year earnings are now expected to be around the high end of previous guidance, and expectations for next year are higher than the current city consensus. Shares rose 13% or 6.65p to 59p.

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Borrowing rises to £13.5bn, below city forecasts

Net public sector borrowing came in at £13.5bn in October, below the consensus forecast of £21.5bn but well above last October’s £9.3bn.

It is the second month in a row that borrowing has exceeded last year’s monthly total and was the fourth-highest deficit in October since records began in 1993.

Borrowing was £84.4 billion for the first seven months of the financial year, but this is before government support for energy prices and cost-of-living payments.

The impact of this support and the pressure of the weakening economy means that Capital Economics believes borrowing will reach £175bn or 6.9% of GDP in 2022/23 – some £42bn more than in 2021/22 .

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Ruth Gregory, senior UK economist, said the clearly deteriorating path “will only encourage the chancellor to keep a firm grip on public finances”.

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AO World’s losses triple as CEO vows to boost profitability on restructuring

Pre-tax losses at online retailer AO World tripled to £12m in the six months to September as the company said a major restructuring would cut costs by £30m and boost profitability to the high end of forecasts.

The company said it had cut back on staff after pulling out of the market in Germany, as well as cutting ties with Tesco in a bid to improve efficiency.

CEO John Roberts told the Standard: “Whether it’s a good idea or not, if it costs money or doesn’t make a profit in the short term, then we’ve looked into that.”

“There’s obviously a lot of macroeconomic uncertainty…but this isn’t our first rodeo.”

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Brent crude at $87 a barrel, FTSE 100 seen higher

A resilient session on Wall Street has set the tone for London’s FTSE 100 index to open slightly higher today.

The FTSE 100 fell 0.1% yesterday, after concerns about more Covid outbreaks in major Chinese cities sent the price of Brent oil down as much as 5%.

Brent held steady today at $87.65 a barrel and CMC Markets expects the FTSE 100 to open 24 points higher this morning at 7,400.

Speculation about the possible spike in US interest rates continues to boost sentiment on Wall Street, with policymaker Mary Daly yesterday warning of the dangers of going too far in monetary policy tightening.

A clearer picture may emerge tomorrow when the Federal Reserve releases the minutes of its most recent policy meeting.

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