Wednesday’s headlines will likely be dominated by Chancellor George Osborne, who is due to deliver a dual autumn statement and spending review.
Heading into the statement, the chancellor has been hit by the blow that October government borrowing figures were the worst for more than six years.
Public sector net borrowing rose £1.1bn in October compared with the same month a year ago to £8.2bn and means Osborne will need to restrict borrowing to just £15bn between now and April.
After the House of Lords blocked his working tax credit changes, it will be interesting to see “how, if at all, he finds the £4.4bn of budget savings lost by the rejection” Investec said.
The broker added that the spending review should be the “more significant event” with markets looking to see exactly how the Chancellor allocates the reductions in public expenditure across relevant departments
On the corporate front, Daily Mail and General Trust (LON:DMGT) will deliver its full-year results tomorrow, with investors keen to hear more on the disposal of its Local World stake.
Barclays said it has lowered its earnings expectations for the year, based on the dilutive impact of selling their 39% stake in Local World.
In theory, it said, they will spend the £73mln of cash raised over time, even if the disposal will still be net dilutive.
“Overall, forecasts are coming down but due to a sensible disposal,” the broker said.
It added that, though the business has faced challenges recently, it does not believe it deserves to be one of the cheapest in the sector, and so has out an ‘Overweight’ rating on the stock. Daily Mail & General Trust PLC: Updating for Local World disposal
Significant announcements expected:
Final: Thomas Cook Group (LON:TCG), Daily Mail & General Trust (LON:DMGO), Britvic (LON:BVIC),
Interim: RPC Group (LON:RPC), TR Property Investment Trust (LON:TRY), VP (LON:VP.), Betfair Group (LON:BET), United Utilities Group (LON:UU.), Hogg Robinson Group (LON:HRG)
Economic: UK – Chancellor statement; US – Personal income and spending, new home sales, house price index, crude oil inventories