Energy companies to be propped up by government as crisis deepens

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Good morning.

UK borrowing shot higher in August to hit £20.5bn after July’s fall, much higher than a consensus forecast of £15.6bn.

The figure is the second highest August on record, according to the Office for National Statistics, after a peak of £26bn for the same month a year ago. The difference was mostly offset by a £5.3bn jump in central government receipts, with spending just £1bn less than it was a year ago.

Public sector net debt hit £2.2 trillion at the end of August, or around 97.6 of GDP, the highest ratio since 1963’s 98.3pc.

5 things to start your day 

1) Chinese property crisis rocks global markets: Stock markets fell around the world on Monday amid rising fears that a property crisis in China has put the global recovery from Covid at risk.

2) British Airways owner soars as US opens the door to Britain and Europe: The end of the travel ban comes as a major boost to IAG, which relies on transatlantic flights for a significant proportion of its revenue.

3)  National Express targets Stagecoach takeover: The FTSE 250 coach operator has been discussing an audacious takeover of Perth-based Stagecoach, sources told Bloomberg. 

4) Pimlico Plumbers sale nets £100m-plus payday for Charlie Mullins: Pimlico is understood to have been sold for between £125m and £145m. Mr Mullins has a 90pc stake in the business he founded in 1979, with the remainder belonging to his son Scott.  

5) Poland defies €500,000-a-day Brussels fine to keep coal mine open: The European Court of Justice ordered Poland to pay the hefty fine on Monday after operations continued at the Turow open-pit lignite mine in the country’s south-west despite an injunction.

What happened overnight 

Equities fluctuated in Asia on Tuesday, with investors nervously keeping an eye on troubled property giant China Evergrande after fears over its possible collapse sparked a rout across global markets.

Hong Kong-listed real estate firms, which took the brunt of the selling on Monday, tanking more than 10pc, managed to squeeze out gains in the morning as bargain-buyers moved in, but there remains a lot of uncertainty.

Hong Kong’s Hang Seng Index, which plunged more than 3pc Monday, edged up 0.2pc. There were also gains in Sydney and Singapore. Tokyo lost 2pc as Wellington, Manila and Jakarta also fell.

Coming up today

  • Corporate: Interim results: Kingfisher, JTC; Trading update: Compass Group, Oxford Instruments
  • Economics: Public sector borrowing (UK); housing starts (US)



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