The FTSE 100 edged lower on Tuesday, weighed down by concerns over rising government borrowing and a fresh review into the state pension age.
The blue-chip index opened down 0.1% at 9,008.80, while the FTSE 250 slipped 0.2% to 21,973.83. The AIM All-Share offered a small lift, up 0.1% at 771.75.
Pressure on UK public finances continued to mount after official figures showed government borrowing far exceeded forecasts. Public sector net borrowing totalled £20.68 billion in June, well above analyst expectations of £15.6 billion and up from £17.44 billion in May.
According to the Office for National Statistics, this marks the second-highest June borrowing since records began in 1993, only trailing the pandemic-hit June 2020.
Over the April-June period, borrowing hit £57.8 billion, £7.5 billion more than the previous year and the third-highest on record for the three-month window. The monthly budget deficit also widened to £16.3 billion, £7.1 billion higher than a year earlier.
The worse-than-expected borrowing figures landed just as Chancellor Rachel Reeves announced a fresh review into the state pension age, saying it was necessary to ensure the system remains “sustainable and affordable.” The review is scheduled to conclude in March 2029.
In equities, Centrica led FTSE 100 risers, climbing 4.1% after agreeing to buy a 15% stake in the Sizewell C nuclear project. The company will contribute £1.3 billion in construction funding for the £38 billion plant, which is expected to provide 7% of the UK’s electricity needs once completed.
International Public Partnerships, which is investing £250 million for a roughly 3% stake in the project, edged down 0.2%.
Surface Transforms surged 49% after reporting a 72% jump in first-half revenue to £8.1 million, reflecting improvements in production output and quality. CEO Kevin Johnson said the business had made pivotal operational gains and was cautiously confident in maintaining progress.
Fulcrum Metals tumbled 19% after raising £1 million via a discounted placing and subscription, which included a £175,000 strategic investment by Metals One. Metals One dropped 8.2%.
In the US overnight, Wall Street’s rally fizzled out as the Dow Jones closed fractionally lower, while the S&P 500 added 0.1% and the Nasdaq climbed 0.4%.