What to Watch: UK public borrowing soars, Royal Mail woes and William Hill shakeup

Tom Belger
Finance and policy reporter
The HM Treasury building in London. Photo: Kirsty O'Connor/PA Images via Getty Images

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

UK government borrowing hits five-year high

UK government net borrowing rose to a five-year October high last month, official figures show.

The Office for National Statistics (ONS) data comes as the main UK parties all pledge to ramp up public spending in an election campaign dubbed a “spending arms race” by one think tank.

Party leaders have said low interest rates make it sensible to continue to raise borrowing to invest in the economy to boost growth, after years of unprecedented austerity aimed at reducing the goverment’s debt and deficit.

Borrowing reached £11.2bn, up £2.3bn on a year ago, to cover the shortfall between government spending and its income, according to the ONS.

Royal Mail shares plummet as turnaround plans delayed

Royal Mail (RMG.L) shares sank 17% on Thursday morning, after the company warned its transformation plans were “behind schedule.”

It also warned its UK arm could slide to a loss in the next financial year, despite reporting better profits and revenue over the past six months.

The company, one of the oldest post services in the world, reported an operating profit of £61m for the year to 29 September, compared to a £4m loss a year earlier.

Parcel volumes also increased but it said it expected continued pressure on margins on both UK parcels and international letters.

A stand-off with a trade union has also hit the company, with a recent dispute over pay and pensions and threats of strike action.

William Hill shares up despite branch decline

William Hill shares rose 1.9% as it said it was “on track” to meet its forecasts, with rapid online growth despite plunging sales in its branches after a government gambling crackdown.

The gambling firm (WMH.L) saw its like-for-like sales in UK retail plunge 16% in the 17 weeks to the end of October compared to a year earlier. The company has embarked on a programme of mass store closures.

It comes after a UK government crackdown on lucrative and controversial fixed-odds betting terminals, on which many high street bookmakers relied for large shares of their profits.

But William Hill saw its UK online revenues rise 4% and US revenue leap 60% as it expands rapidly in the country after reforms to US betting regulation last year.

Trade dents European stocks

European markets sank on Thursday, with corporate earnings and global trade gloom biting shares.

The FTSE (FTSE) fell sharply, down 0.6% in mid-morning trading in London. The French CAC 40 (^FCHI) was down 0.4%, the Euro Stoxx 50 (^STOXX50E) down 0.3% and the German DAX (^GDAXI) down 0.2%.

Overnight in Asia, the Hong Kong Hang Seng Index (^HSI) plunged 1.6%, China’s Shanghai Composite index (000001.SS) was down 0.3% and the Nikkei dropped 0.5% (^N225).

What to expect in the US

US stocks also looked set to rise on the open on the global trade hopes. Dow Jones futures (YM=F), S&P 500 futures (ES=F) and Nasdaq futures (NQ=F) were all down 0.1%.