UK government borrowing at record December figure; business activity in sharpest drop for two years – business live

LIVE – Updated at 10:29 Government borrowing surges to £27.4bn as debt interest jumps to £17.3bn, also the highest December figure on record, limiting the

chances of big budget giveaways.   10:29 Bert Colijn, senior eurozone economist at ING, says: The jump in the composite PMI from 49.3 to 50.2

indicates that the economy is performing better than expected. Businesses are experiencing fewer cost pressures than before, but selling prices remain high. For the ECB, this

should seal the deal for a 50 basis point hike next week. Sometimes you just need a bit of luck. The eurozone economy has avoided dramatic scenarios for the winter thanks

to an extremely mild December in which gas storages have been depleted much less than feared. Whether this is a recession or not is almost semantics at this point. The PMI

jumped above the 50 level, which indicates growth in the business economy. While the difference between -0.1 and 0.1% growth is interesting for economists, the overall sense of

stagnation will likely prevail for most. More important is that improvements in the PMI were broad-based as both the manufacturing and services PMIs ticked up. New orders

are still falling, but at a slower pace than before and businesses have again seen hiring increase. The latter confirms our view that labour shortages are here to stay despite the

sluggish economic performance. That brings upside risk to the wage growth outlook.