8th Oct 2025 12:00
(Alliance News) - The FTSE 100 index was in the green at midday on Wednesday, after the Office for National Statistics revised down UK government borrowing figures for the current fiscal year by GBP2 billion, following the discovery of an error in the original data.
The ONS said that HM Revenue & Customs had alerted it to inaccuracies in value-added tax receipts, which affected its estimates for the government borrowing figures published on September 19, the Financial Times reported.
As a result of the errors, which cover the period from January to August this year, the ONS cut its estimate for government borrowing for the current fiscal year, which began in April, by GBP2 billion. It also reduced the borrowing figure for the previous fiscal year by GBP1 billion.
Correcting for the errors, the ONS said borrowing for the fiscal year to August was GBP81.8 billion, down from the GBP83.8 billion initially reported in its September 19 release. The total is still above the GBP72.4 billion forecast for the period by the Office for Budget Responsibility.
The FTSE 100 index was up 52.74 points, 0.6%, at 9,536.32. The FTSE 250 was down 22.73 points, 0.1%, at 21,980.07, and the AIM All-Share was down 0.81 points, 0.1%, at 795.51.
The Cboe UK 100 was up 0.6% at 951.81, the Cboe UK 250 was marginally higher at 19,227.51, and the Cboe Small Companies was down 0.1% at 17,978.08.
"The FTSE 100 was propelled by Lloyds enjoying a relief rally amid relatively positive news on the motor finance scandal, while Endeavour Mining continued to shine off the back of gold surpassing USD4,000 an ounce for the first time," AJ Bell's Russ Mould said.
Endeavour Mining was up 2.2%, making it the third-highest FTSE 100 firm. Antofagasta came in first, rising 3.1%.
Lloyds Banking was the second-highest large cap, up 2.6%.
The London-based lender said it is reviewing the potential impact of a proposed industry-wide compensation scheme for UK motor finance customers, following an announcement by the Financial Conduct Authority.
On Tuesday, the regulator estimated that compensation for mis-sold car finance could cost UK banks around GBP8.2 billion, below its earlier forecast range of GBP9 billion to GBP18 billion.
The FCA said its investigation had found "widespread failures to adequately disclose the existence and nature of commission and contractual ties between lenders and brokers," which led some customers to overpay on car loans.
Lloyds, which has already set aside GBP1.2 billion to cover possible costs linked to motor finance mis-selling, is among several banks likely to be affected by the FCA's proposed redress scheme.
Fellow FTSE 100 constituents Barclays and NatWest gained 1.4% and 1.7% respectively, following the announcements.
"The motor finance scandal is proving to be less dramatic than thought," Mould commented, adding that Lloyds' GBP1.2 billion provision "now looks like a reasonable assumption".
"The fact its share price jumped means the market is comfortable with the outcome and that a big uncertainty factor will soon be removed," he continued. "Lloyds' management will be keen to shift the market's focus to the bank's growth opportunities in the future, not what it has done in the past."
FTSE 250-listed merchant banking group Close Brothers rose 1.1%, and small-cap motor finance and bridging lender S&U gained 3.0%.
Back on the FTSE 250, IP Group gained 2.3%.
The London-based investor in science and technology companies noted the upcoming takeover of its investee Monolith Ltd by Nasdaq-listed cloud software firm CoreWeave Inc. IP Group has a 12.3% stake in Monolith, an Imperial College London spinout that provides artificial intelligence software to engineers.
Financial details of CoreWeave's offer for Monolith have not been disclosed, but IP Group Chief Executive Greg Smith said the disposal "marks another positive exit from our 'deeptech' portfolio".
AIM constituent WH Ireland more than doubled.
Noting "the recent press speculation concerning the proxy voting for the upcoming general meeting [on Thursday]", the London-based wealth-management firm said that "at this stage the proxy votes filed with the company's registrars indicate that the resolutions will fail".
The GM's purpose is to consider resolutions to authorise the proposed disposal of WH Ireland's wealth management business, and the associated delisting of its ordinary shares from trading on AIM, the company explained.
Xeros Technology jumped 15%.
The Rotherham, England-based laundry technology developer announced the signing of a "breakthrough" development and product launch agreement with "one of the world's largest, branded washing machine manufacturers". The deal will follow a paid-for, time-bound process with defined milestones and deliverables, it said.
The intended outcome is "the mass production of domestic washing machines using Xeros' laundry care technology," the company said, adding that it expects similar deals to follow.
Angle, meanwhile, dropped 27%.
The Guildford, England-based liquid biopsy company is proposing to change its name to CelLBxHealth PLC. It said the new name reflects its "sharpened focus on 'CTC intelligence', the provision of high-value CTC-based precision diagnostic testing for the pharmaceutical services sector and the clinical diagnostics market".
Also, Non-Executive Chair Jan Groen has moved to become executive chair and "will lead the company as it pursues a revised strategy, focused on tight cost control, accelerated commercial progress and a clear plan towards becoming a sustainable business," Angle said.
In other UK news, the National Health Service may need to pay more for medicines under plans to stave off tariffs threatened by US President Donald Trump, it has been reported.
Politico reported that proposals, including raising the threshold used by England's NHS spending watchdog by 25%, had been briefed to Washington officials. The government has confirmed that it is in "advanced discussions" with the US to "secure the best outcome for the UK".
In European equities on Wednesday, the CAC 40 in Paris was up 0.6%, while the DAX 40 in Frankfurt was up 0.4%.
France's outgoing prime minister, whose two immediate predecessors were ousted by the legislative chamber in a standoff over spending plans, has said consultations to end a political crisis had shown a willingness across parties to agree on a budget by the end of the year.
Sebastien Lecornu, whose resignation on Monday caused the Paris stock market to slip, reported consensus so far on "a desire to have a budget for France before December 31".
Meanwhile in Germany, the Federal Statistical Office reported that industrial production fell 4.3% in August from July, after a 1.3% climb in July from June.
Annually, industrial output was 3.9% lower in August, compared to growth of 1.5% in July.
Pertinently, the automotive industry, Germany's largest industrial branch, had a 19% on-month fall in output in August, which the statistical office noted may be explained by a combination of annual plant closures for holidays and production changeovers.
The pound was quoted lower at USD1.3422 at midday on Wednesday in London, compared to USD1.3440 at the equities close on Tuesday. The euro stood lower at USD1.1627, against USD1.1672. Against the yen, the dollar was trading higher at JPY152.85 compared to JPY151.02.
Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.1%, the S&P 500 index up 0.1%, and the Nasdaq Composite up 0.2%.
The yield on the US 10-year Treasury was quoted at 4.11%, narrowing from 4.13%. The yield on the US 30-year Treasury was quoted at 4.71%, narrowing from 4.73%.
"The US shutdown rumbles on once again today, with markets largely unperturbed at the uncertainty that comes as a result," Rostro's Joshua Mahony commented. "Tomorrow's jobless claims data looks unlikely to hit the newswires, with today's FOMC minutes instead taking on a key role.
"However, we have seen some of the heat come out the market after the early record highs seen in the Nasdaq yesterday, with commentary from Fed's Kashkari warning that rapid rate cuts would risk stoking inflation. Nonetheless, Trump's man in the Fed cared little for that kind of cautious tone, with Stephen Miran instead calling for a whopping five cuts over the course of next year. That is some way away from the single 25bp cut outlined in the latest Federal Dot Plot.
"With the committee taking increasingly divergent views, and Trump expected set to appoint a new Chair in May, the pathway for rates over the course of 2026 remains anything but clear right now."
Brent oil was quoted higher at USD66.05 a barrel at midday in London on Wednesday, from USD65.28 late Tuesday.
Gold was quoted higher at USD4,036.30 an ounce, against USD3,985.98 on Tuesday.
"While stock markets have generally done well this year, gold has been a superstar," Mould commented. "Traditionally, investors would load up on the shiny stuff when markets look gloomy, not when they're motoring ahead.
"It shows that investors are hedging their bets, particularly as there are growing concerns that euphoria around AI has gone too far and the bubble could burst at some point."
Still to come on Wednesday's economic calendar, the US has EIA crude oil stocks and US FOMC minutes, plus comments from Fed Vice Chair Michael Barr.
Bank of England Chief Economist & Executive Director Huw Pill is due to speak in the afternoon, followed by European Central Bank President Christine Lagarde in the evening.
By Emma Curzon, Alliance News reporter
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