- FTSE down 11 points to 9,216
- Mid-cap gold stocks glisten
- Govt borrowing reaches £18bn in August
- Retail sales perk up in August
4.42pm: Stocks slip
The sterling the FTSE 100 both dipped amid sharply rising UK borrowing costs. The FTSE 100 closed down 11 points at 9,216 points.
“The UK’s August budget deficit surged to £18 billion, far above forecasts, sparking market concerns over fiscal sustainability, weakening sterling to its lowest in weeks, weighing on the UK stock market and pushing gilt yields higher amid fears of mounting inflation and limited policy flexibility,” IG senior technical analyst Axel Rudolph said.
“Meanwhile the three main US indices hit yet more record highs while France's industry confidence weakened slightly and China's foreign direct investment dropped 12.7% year-on-year in the first eight month of the year, amid global uncertainty."
3.56pm: Mid-cap gold stocks in demand
Caledonia Mining Corporation PLC (AIM:CMCL, NYSE-A:CMCL, VFEX:CMCL) and Premier African Minerals Ltd (AIM:PREM, OTC:PRMMF) led the charge in London after bullion prices rebounded, with the shares up 5% and 2% respectively.
Larger rivals joined the advance, Endeavour Mining climbing 4% and Fresnillo adding 3% as silver rose 32 cents to $42.12. Gold itself rallied $10 to $3,654.69 an ounce, reversing Thursday’s decline.
Helping lift sentiment was a note from UBS in which it told investors: "Gold stocks are no longer unloved and undervalued...but we remain bullish gold. Earnings momentum is positive and valuations undemanding."
Earlier this week, Deutsche Bank struck an increasingly bullish note on the outlook for precious metals.
Its analysts believe gold could average $4,000 an ounce next year, with silver tipped to reach $45, up from a previous forecast of $40.
One plank of the case is monetary policy. After three US rate cuts this year, Deutsche sees scope for the Federal Reserve to loosen further in 2026, despite its base case of a pause. Lower US rates typically weaken the dollar, historically the single strongest driver of gold.
Central bank appetite is another force. Official purchases, dominated by China, are running at double the pace of the decade to 2021 and could reach 900 tonnes in 2026. Supply, by contrast, is constrained: recycling is running about 4% lower than expected this year.
Positioning indicators are also not stretched. Exchange-traded funds hold about 17 million ounces less than at the 2020 peak, while speculative bets remain modest.
Risks remain. A buoyant Wall Street, with Deutsche’s S&P 500 target now 7,000, may draw capital away from defensive assets. Seasonality is another drag: the fourth quarter has historically been bullion’s weakest.
Still, with official demand strong and silver in its fifth year of physical deficit, Deutsche expects both metals to push higher into 2026.
1:50pm: Wall Street indicated slightly higher
The Nasdaq is expected to build on its new record when trading gets underway on Friday, while the Dow Jones is likely to be unchanged.
Nasdaq Futures traded 0.1% firmer ahead of the open, with those for the S&P 500 up just 4 points while Dow futures were flat.
All three indexes finished Thursday’s session at record highs, lifted by the Fed’s quarter-point cut. The Nasdaq led the gains, up 0.9%. The S&P 500 added 0.5% and the Dow Jones was up 0.3%.
11am: Small caps in the news
Valereum PLC (AQSE:VLRM) has outlined progress in building a blockchain-based financial ecosystem for asset tokenisation. It now offers regulated capabilities in issuance, settlement, custody, and fiat integration through partnerships with DigiShares, Blubird, and Fideum. CEO Gary Cottle said the company is fast-tracking growth and embedding infrastructure for mainstream adoption. Read more
Futura Medical PLC (AIM:FUM, OTC:FAMDF) has expanded its strategic review after warning that 2025 revenue will fall short at £1.3–£1.4 million, versus £5 million expected. Slower Eroxon sales, delayed milestone payments, and weak reorders contributed. The company is considering cost cuts, financing, and potential asset sales. Read more
Genflow Biosciences PLC (LSE:GENF, OTCQB:GENFF) has filed for patent examination in China to protect its SIRT6 gene-based therapy for non-alcoholic steatohepatitis (NASH). The move strengthens its intellectual property in Asia. CEO Eric Leire called it a significant step in a key market. Similar filings are underway in other healthcare regions. Read more
Thruvision Group PLC (AIM:THRU, OTC:DIGTF) shares fell 20% after reporting a revenue drop to £4.2 million and widening losses. The fall was due to fewer large orders, though core retail sales rose. Year-end cash stood at £0.4 million. A £2.75 million fundraise followed. Early new-year trading has reportedly strengthened. Read more
Skillcast Group PLC (AIM:SKL) jumped 8% after posting strong half-year results. Revenue rose 18% to £7.5 million, driven by subscription growth, while EBITDA climbed to £0.7 million. Margins widened, cash flow doubled, and the interim dividend was lifted 20%. Read more
Life Science REIT PLC (AIM:LABS) edged higher after announcing a planned wind-down of its portfolio, ending a six-month strategic review. The company received offers but opted for gradual asset sales over 12 to 18 months, aiming to repay debt and return capital. The board believes this will maximise shareholder value. Read more
Power Metal Resources PLC (AIM:POW, OTCQB:POWMD) has announced a planned share reorganisation to reduce the number of shares in issue. The move aims to enhance flexibility for shareholder returns, including dividends and buy-backs. Read more
10.30am: Footsie supported by weaker pound
Those borrowing numbers have provided a bit of support to the Footsie this morning due to the weaker pound.
While the FTSE 250 has shed 108 points to 21,618.13, a loss of 0.5%, the FTSE 100 is still above water, with a four-point gain to 9,232.03.
“Sterling weakness off the back of higher than anticipated UK public borrowing helped the FTSE 100, given the dominance of overseas earners in the index, with precious metal miners leading the way," commented AJ Bell's Russ Mould.
On the continent, Frankfurt's Xetra Dax is up 0.2% and the Paris CAC 40 is 0.7% firmer.
9am: Government borrowing at 5-year high
The UK government borrowed £18 billion last month – the biggest August splurge in five years and £3.5 billion more than last year.
So far this financial year, borrowing has hit £83.8 billion, making it the second-highest April-to-August total since records began, according to ONS data out this morning.
The current budget deficit is now £62 billion, up £13.8 billion on the same period in 2024. Public sector debt continues to pile up, sitting at 96.4% of GDP – levels not seen since the 1960s. Meanwhile, net financial liabilities hit 84.5% of GDP.
In short, the government’s still spending more than it’s bringing in.
Undeterred, the FTSE is now 11 points up at 9,238.7.
8.15am: Footsie unsteady at the open
London's FTSE 100 defied speculators, opening lower as the week draws to a close following a raft of central bank interest-rate decisions, which saw the US Fed cut rates but the Bank of England and the Bank of Japan hold steady.
About 15 minutes into the session, London's blue-chip index had erased its initial losses to trade just two points higher at 9,229.61.
Gold miners Fresnillo PLC (LSE:FRES) and Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) are leading the gainers this morning, both up more than 3%, as the gold price holds near recent highs at $3,646.05 an ounce.
London Stock Exchange Group PLC (LSE:LSEG), information and analytics company RELX PLC (LSE:REL) and advertising giant WPP PLC (LSE:WPP) are the biggest decliners, down 2,6%, 1.8% and 1.4% respectively.
8am: Warm weather buoys retail sales
There's good news for retailers this morning: UK retail sales rose 0.5% in August, marking three straight months of growth.
Shoppers hit the high street for clothes and fresh food, helped along by some decent weather. Online sales also kept climbing, up 0.4% on the month and 4.7% year-on-year.
Over the past three months, overall sales dipped slightly, but August was still up 0.7% compared to last year. Online made up 27.6% of total sales, holding steady from July.
7.15am: Muted end to busy week
FTSE 100 futures are indicating a small gain as the market winds down for the weekend in a week packed with central bank action - or inaction.
London's blue-chip index has been called seven points higher after ending Thursday's session 19 points up at 9,228, a gain of 0.2%.
The Bank of England held interest rates steady at 4% yesterday, saying the UK was not out of the woods on inflation, which remains stubbornly high. That came a day after the US Federal Reserve cut interest rates for the first time this year, by 25 basis points, and indicated there would be more to come before the end of the year.
The Bank of Japan has kept its short-term policy rate steady at 0.5% at the end of its two-day meeting.
Overnight, the three major US stock indexes finished at record highs, lifted by the Fed’s quarter-point cut. The Nasdaq led the gains, up 0.9%. The S&P 500 added 0.5% and the Dow Jones was up 0.3%.
Asian markets are mostly weaker this morning, with Japan's Nikkei down 0.6% and India's Sensex falling 0.5%. The Hong Kong and Shanghai markets are flat. in Australia, the ASX is up 0.3%.