UK Net Borrowing Falls; Thomas Cook Soars 11%

Arthi Gupta
21 Oct, 2011
New York City

The UK indexes climbed and public sector net borrowing and consumer confidence fell in September. Irish trade surplus rose in August. Thomas Cook soared 11% after reaching an agreement with its banks to amend the terms of the existing credit facilities.

[R]3:00 PM London – The UK indexes climbed and public sector net borrowing and consumer confidence fell in September. Irish trade surplus rose in August. Thomas Cook soared 11% after reaching an agreement with its banks to amend the terms of the existing credit facilities.[/R]

The UK indexes gained after reports that European leaders will agree on a plan to release $1.3 billion of funds and recapitalize banks.

Finance ministers are meeting in Brussels today to lay the groundwork for the meeting on Sunday. France and Germany are still at odds in how to leverage the European Financial Stability Fund and euro-zone leaders will meet again on Wednesday for taking the final decision on resolving the debt crisis plaguing the region.

Investors are increasingly worried that the EU plan will fall short of market expectations and banks will be asked to take larger losses in Greek bonds. Separately, ratings agencies are prepared to lower European sovereign debts if the region slips into a recession.

In London, FTSE 100 Index surged 81.31 or 1.5% to 5,466.37 and the pound edged higher to $1.5900. For the week, the FTSE 100 Index closed flat. .

UK Net Borrowing Falls

The UK''s public sector net borrowing, excluding support for banks, fell to £14.1 billion in September from £15.4 billion logged during the same period of the prior year, the Office for National Statistics reported today.

Separately, the UK households'' expectations of home prices turned pessimistic in October. The future home price sentiment index, which measures expectations of home prices in the next twelve months, dropped to 47.7 in October from 53.6 in September.

UK Confidence Drops

Consumer confidence in the UK decreased in September for the fourth straight month. The Nationwide Building Society''s index of consumer confidence declined in September to 45 from the August reading of 48.

The portion of those surveyed who said their outlook for the economy in the coming six months was ""good"" declined to 15% from 16% and those describing their outlook as ""bad"" also declined to 35% from 36%, Nationwide said.

Irish Surplus Rises

Ireland''s unadjusted trade surplus increased to €3.25 billion in August from €3.22 billion in August 2010, preliminary data released by the Central Statistics Office showed.

Exports advanced 5% from a year ago to €7.01 billion, while imports rose 8% to €3.76 billion in August.

Gainers & Losers

Aggreko Plc dipped 0.3% to 1,699 pence after the supplier of temporary power and temperature control said its third quarter underlying revenues grew 22% from last year, helped by strong performance in both its business units.

Fitbug Holdings Plc surged 21.8% to 3.80 pence after the provider of online personal health and fitness services signed a device and software licence agreement with Boston-based MeYou Health, a wholly-owned subsidiary of Healthways.

Provident Financial Plc climbed 0.1% to 1,098 pence after the home credit provider said it expects a good result for the year, citing ''extremely sound'' credit quality in both its businesses.

The company noted that market conditions for both consumer credit division and Vanquis Bank businesses have remained stable through the third quarter of the year.

Rank Group Plc gained 0.6% to 127.80 pence after the gaming and betting services company said revenue for the 16 weeks ended October 16 was in line with the same period last year, while for the 42 weeks ending October 16, revenue grew 3% on a total as well as comparable basis.

Thomas Cook Group Plc soared 10.9% to 50.50 pence after the tour operator said it has reached agreement with its banking group to amend the terms of the existing bank facilities to increase financial flexibility.