UK’s total government debt hits £3tn for first time
The UK’s fiscal position is also not exactly rosy, as the latest public finance figures show.
The Treasury ran a higher than expected budget deficit of £24.5bn last month as rising inflation pushed up the interest paid on government debt, increasing pressure on John Healey before his budget next week.
Official figures show the government paid £10.9bn in debt interest: the highest September figure since records began, and only the eighth time the monthly number has been above £10bn.
Some government bonds are directly linked to the retail prices index measure of inflation, with payments rising in line with it. RPI has increased in recent months as the Iran war has pushed up energy costs. The Office for National Statistics said this had added £4bn to debt interest costs in September alone.
Total government debt is estimated to have hit £3tn for the first time – although as a share of the size of the economy it has dipped to 94%, from 95% a year ago.
The £24.5bn monthly deficit on the public finances was up from £17bn in August, and £1.9bn higher than the independent Office for Budget Responsibility had forecast.
In the financial year so far, public sector net borrowing is £97.8bn, the ONS said – £4.4bn lower than last year but still £6bn higher than the OBR expected. The data underlines the impact of the Iran war on the public finances.
Healey has been keen to stress his determination to stay within the fiscal rules set out by his predecessor as chancellor, Rachel Reeves.
However, he is widely expected to accept a slimmer financial buffer, or “headroom”, against those rules than the £24bn Reeves had built up at the time of her spring forecast.
Henning Diederichs, director for public sector at the Institute of Chartered Accountants in England and Wales, said:
The rising cost of borrowing and inflation mean that servicing the debt is a significant concern for the chancellor as he prepares for his first Budget next week.
Pressures are mounting to provide additional support for rising energy bills, but the fiscal challenges to balance spending are becoming more acute, particularly as John Healey has less headroom than in the spring forecast.
This is why the government needs to clarify the definition of current budget balance in the fiscal stability rule, given it is changing from a current budget surplus at this Budget. Ambiguity about what the new definition means for headroom could create a negative inflationary loop meaning further increases in borrowing costs and reduced investor confidence.
Key events
Closing summary
Inflation surged to 3.5% last month while the government deficit was a worse-than-forecast £24.5bn, in a double dose of bad news for John Healey before next week’s budget.
The Office for National Statistics said annual inflation rose from 3.1% in August, overshooting City forecasts of a rise in the consumer prices index (CPI) to 3.4%, as a result of the surging cost of fuel.
Oil and gas prices have soared since the end of February, when the US and Israel launched their war on Iran, throttling the flow of fuel through the strait of Hormuz.
Rising inflation has also contributed to higher government borrowing costs – the key factor behind the deterioration in the public finances since the spring statement in March.
While the Jackdaw gasfield in the North Sea was approved by the UK government today, Miatta Fahnbulleh is leaning towards rejecting the giant Rosebank oilfield, the Guardian understands, in what would be a blow for the North Sea energy industry and a major victory for climate campaigners.
Officials say the energy secretary is minded to refuse approval for the field, which would be one of the biggest in the North Sea. Fahnbulleh approved the smaller Jackdaw gasfield on Wednesday, prompting protests from some in the green movement.
But she told the Guardian that the rationale behind Jackdaw did not apply to Rosebank, saying the UK would rely on gas as it made the transition to net zero and that it would be better to take it from relatively low-carbon sources in the North Sea than importing it.
One is a gasfield that caters for the domestic market, while the other is an oilfield that is mainly for export. It is right that we judge each application in its own right, and it is absolutely critical that the decision is consistent with our climate obligations, our carbon budgets and the end destination we need to get to with the energy transition.
France’s borrowing costs have climbed above 5% for the first time in 24 years as political concerns and the government’s failure to agree a much-delayed budget spook the financial markets.
With some civic buildings still smouldering from recent riots, a fresh bout of selling pushed up the yield – or interest rate – on bonds issued by the second largest economy in the eurozone.
The yield on the benchmark 10-year bond – known as obligation assimilable du Trésor (Oat), issued by the French Treasury – rose more than 8 basis points to 5% in morning trading, before easing to 4.99%.
The French government has yet to pass its budget for next year, while the country has been rocked by increasingly violent street protests in recent weeks.
Thank you for reading. We’ll be back tomorrow. Take care! – JK
Ambani’s Jio IPO oversubscribed within hours in record Indian sale
Jio Platforms, the Mumbai-based telecoms company backed by Meta Platforms and Google, has seen huge demand for its shares as it launched its $3.2bn initial public offering (IPO), the biggest-ever in India.
India’s second-richest man, Mukesh Ambani, launched the IPO despite a stock market downturn. It drew bids for more than double the shares available and was oversubscribed in less than two hours, according to Reuters.
The IPO values Jio at up to $108.3bn, and is expected to turn it into one of India’s biggest companies by market value when the shares start trading next Wednesday. Around a third of the shares were reserved for retail investors, and the company encouraged is 400,000 staff to buy shares at a discount.
Set up a decade ago as a subsidiary of Ambani’s conglomerate Reliance Industries, and led by Akash Ambani, the oldest son of patriarch Mukesh, Jio offers low-cost broadband to millions of Indians. It has grown into India’s biggest telecoms company with more than 500 million subscribers.
GSK’s chronic hepatitis B drug approved in US; experts talk of ‘new era’
Also on the medical front, GSK, the UK’s second-biggest pharmaceutical company, said its drug Hibsago, or bepirovirsen, has been approved in the US for the treatment of chronic hepatitis B (CHB).
It offers “functional cure” after just six months treatment, leading experts to talk of a “new era in treating people living with CHB”.
Data from late-stage clinical trials showed unprecedented rates of functional cure compared to the current standard of care. GSK expets the drug to generate annual sales of more than £2bn at its peak.
CHB affects about 1.7 million people in the US. The US regulator FDA gave the medication the green light after a priority review and breakthrough therapy designation, which speeded up the process.
Functional cure occurs when HBV DNA and viral protein – HBsAg – are undetectable for at least 24 weeks after stopping all treatment, indicating the disease is controlled by the immune system without medication, GSK said.
It’s a six-month treatment and can be injected by patients themselves after the first dose.
The medication has been submitted for regulatory approval in the UK and the rest of Europe.
Tony Wood, chief scientific officer at GSK, said:
Despite current therapies, many people living with chronic hepatitis B remain on treatment indefinitely and continue to face the risk of serious liver complications. For the first time, with Hibsago, US patients have the potential to achieve functional cure after a six-month treatment course, with the added convenience of the option of self-administration after the first dose.
Hepatitis B is a viral infection that can cause both acute and chronic liver disease. Chronic hepatitis B occurs when the immune system is unable to clear the virus, resulting in long-lasting infection that affects more than 240 million people worldwide.
The disease leads t 1.1 million deaths each year and is the main cause of liver cancer cases globally. At the moment, many patients often require lifelong antiviral therapy for viral suppression.
Dr. Norah Terrault, chief of gastroenterology & hepatology, at the USC Keck Medical Centre in Los Angeles, said:
This is the start of a new era in treating people living with CHB. Bepirovirsen offers patients the potential to achieve functional cure after a short period of treatment, a long-standing goal for patients and physicians alike.
GSK executive appointed CEO of Australian biotech CSL
On the corporate front, GSK executive Deborah Waterhouse has been appointed chief executive of the struggling Australian biotechnology company CSL.
Waterhouse, currently the chief executive of UK drugmaker GSK’s HIV drugs venture ViiV Healthcare, will be the first woman to lead Melbourne-based CSL since it was set up more than three decades ago. She will replace interim CEO Gordon Naylor and be based in Britain.
Her appointment follows a months-long search after the abrupt departure of former boss Paul McKenzie in February, who had come under pressure from investors over CSL’s falling share price.
Once Australia’s most valuable listed company, CSL has had a series of profit and revenue downgrades and announced plans to slash 3,000 jobs.
Investor sentiment has improved after CSL forecast growth for fiscal 2027, with its shares more than doubling from a decade low reached in June.
The company’s chair Brian McNamee said Waterhouse had the experience needed to build on the company’s recent improvement.
In February this year we said CSL’s next chief executive would need the ability to continue the momentum of our commercial performance, renew our pipeline and simplify our operations without losing the science and purpose that built this great company.
Deborah has done all those things on multiple occasions.
As well as running ViiV Healthcare, Waterhouse serves as president of GSK Global Health. She previously ran its US vaccines and primary care businesses and held several other senior roles at the British drugmaker, including general manager for Australia and New Zealand from 2008 to 2012.
Analysts at the investment bank Citi said her tenure at ViiV showed an ability to run a global business in a highly competitive market.
Ms. Waterhouse has been thorough and consistent, and demonstrated sound commercial acumen.
I interviewed her in 2022:
CSL reported a net loss after tax of $2.6 for the most recent year, its first annual loss since listing on the Australian stock exchange in 1994, driven by $7.1bn in write-offs mostly due to its 2022 acquisition of the Swiss drugmaker Vifor.
CSL shares closed 0.1% lower at A$196.08 on Wednesday, while the broader stock market rose 0.2%.
With inflation across the UK heading higher again (to 3.5% in September) and just two paydays remaining before Christmas, many consumers are already thinking about how to balance festive spending with everyday costs.
Dave Jones, head of UK consumer at PayPal UK, said:
With only two paydays left before Christmas, many households will be starting to think carefully about how they manage their money in the weeks ahead. While people understandably want to make the festive season special, it’s also a period when spending can add up. With the Consumer Price Index rising by again this month, consumers are looking at how to best manage their budget.
Planning ahead can make a real difference; we know nine in ten Brits are taking steps to control holiday costs. By thinking about Christmas purchases early, setting a realistic budget and spreading costs over the coming weeks, consumers can help avoid a financial squeeze later in the year.
We’re seeing shoppers increasingly look for flexibility and control at checkout, particularly for larger planned purchases. Consumers want payment options that fit their budget and help them manage spending in a way that works for them. Over half of Brits say that knowing how a payment will be split in advance matters.
For those making bigger seasonal purchases, responsible lending options can offer additional flexibility when used appropriately. Solutions such as PayPal Pay in 3 allow eligible customers to spread the cost of purchases over time with no interest or late fees, helping them manage cash flow while staying in control of their finances. One in three Brits have used, or are planning to use Buy Now, Pay Later this festive season.
Ultimately, the run-up to Christmas is less about spending more and more about planning ahead. Taking a considered approach to budgeting, prioritising essential costs and choosing payment options that suit individual circumstances can help consumers enjoy the festive season with greater confidence and peace of mind.
Roger Lee, head of equity strategy at investment bank Cavendish, said the higher UK borrowing figures, with total debt exceeding £3tn in September for the first time, will “intensify scrutiny of the government’s deficit reduction plans”.
The combination of stronger-than-expected inflation, a resilient labour market, and firmer wage growth has materially increased the likelihood of an ‘insurance’ rate rise in November, especially given that the oil price remains elevated above $110/bbl. and there is no obvious reason why it will fall in the near future.
Higher interest rates, alongside rising government debt, will further complicate the UK’s fiscal outlook ahead of next week’s Budget.
Italy: Two airports run out of jet fuel, food and medicine shortages in the south
Lorenzo Tondo
As far as protests go, Lorenzo Tondo in Palermo has sent us this report.
Two airports have run out of jet fuel, supermarket shelves across southern Italy are empty and pharmacies are running short of medicines as lorry drivers continue to blockade roads in protest against soaring fuel prices caused by the war in Iran.
Italy’s air traffic management agency, ENAV, said on Wednesday that airports in Crotone and Reggio Calabria had run out of aviation fuel because of disruptions to supplies caused by the protests. It warned that pilots would have to refuel at their departure airports or earlier stops, carrying enough fuel for subsequent flights.
The protests began last week, with lorry drivers blocking roads and slowing traffic across the country, particularly in the south, following strikes and sit-ins by farmers and fishers. The disruption has left supermarket shelves empty in several regions, with photographs showing entire aisles stripped of goods.
A video of a lorry driver’s teenage daughter breaking down in tears has gone viral after she said her family could no longer afford to go out at weekends because they were struggling to pay their bills.
Italy’s infrastructure minister, Matteo Salvini, has proposed €430m in financial support, but the motorway blockades and lengthy traffic jams continue, putting the government under growing pressure as anger over the cost of living mounts.
The protests have also sparked criticism of Italy’s public broadcaster, Rai, which has been accused of giving greater prominence to violent student demonstrations in Milan than to the economic hardship facing families and lorry drivers in the south. Critics say the coverage plays into the government’s increasingly hardline approach to protests while diverting attention from the growing cost-of-living crisis.
Domino’s Pizza reveals slower sales growth despite new thinner pizzas and fried chicken
Domino’s Pizza shares fell after the company revealed slower sales growth for the latest quarter, despite a boost from new ranges of thinner pizzas and fried chicken.
The London-listed shares fell 4.5% at one stage, and are now down 3%, making Domino’s one of the biggest fallers on the FTSE 250 index.
The company, a UK-based master franchise of the international fast food pizza delivery chain Domino’s, stressed that it continued to grow in August and September following a boost during the football World Cup in June and July.
Nicola Frampton, the chief executive, told investors that it was a “strong performance”, but recognised there is “a lot of work still to be done”. The company has seen sales bounce back this year after weaker orders during a “difficult” 2025.
Like-for-like sales grew by 4% year on year in the first nine months of 2026. However, like-for-like sales growth more than halved to 2.3% in the three months to the end of September, from a 5.2% increase in the previous quarter.
Total sales, which include new stores, rose by 3.5% in the latest quarter, with total order growth of 2.6%. Like-for-like orders increased by 1.4% for the quarter, slowing from 2.2%. Domino’s still expects to meet its profit guidance for this year.
Frampton flagged “strong sales” from Domino’s Italianos range of thinner pizzas, which was launched earlier this year.
The Chick ‘N’ Dip fried chicken brand, which was launched last year to tap into the popularity of chicken among younger consumers, has also done well.
Frampton said:
Whilst there is a lot of work still to be done, this gives us confidence in achieving our expectations for the full year, while building the foundations for further growth in 2027 and beyond.
In financial markets, the price of crude oil has risen 2% today, while gold prices fell to the lowest levels in nearly a week.
Brent crude, the global benchmark, is trading $2.18 higher at $110.96 a barrel.
The rally revived fears of higher inflation and interest rate hikes. Spot gold prices fell for a fourth day, dipping 0.1% to $4,121 an ounce.
Han Tan, chief market analyst at Bybit, a Dubai-based cryptocurrency exchange that was originally founded in China, said:
Gold has adhered to the downtrend that began two months ago on persistent expectations that more Fed rate hikes are in store.
Gold is traditionally seen as a safe-haven hedge against inflation, but loses appeal as a non-yielding asset in a high-interest rate environment.
Following the UK government’s decision to give the Jackdaw gasfield in the North Sea the green light, there have been new protests outside the energy department in London.
Jackdaw is one of the biggest undeveloped gas fields in the North Sea, and the approval was met with outrage from climate campaigners – but welcomed by the declining British North Sea fossil fuel industry, which has also called on the government to approve the Rosebank oilfield.
