Investing.com -- British stocks traded higher in Wednesday afternoon trade, backed by chemical and mining firms, while official data showed U.K. government borrowing climbed to £16.44 billion ($21.87 billion) in March, surpassing expectations.
The blue-chip index FTSE 100 gained 1% and the FTSE Mid-Cap 250 rose about 1.2%. The GBP/USD has declined 0.5% against the dollar to 1.3270.
The best performing stocks include speciality chemicals firm Croda International PLC (LON:CRDA) and miner Anglo American (JO:AGLJ) PLC (LON:AAL), while Reckitt Benckiser Group PLC (LON:RKT) and Fresnillo PLC (LON:FRES) are among bottom performers after providing trading updates.
Meanwhile, DAX index in Germany rose 3.2%, the CAC 40 in France gained 2.1%.
Fiscal year borrowing rises, surpasses OBR estimates
Public sector net borrowing, excluding public banks, surpassed expectations, beating Capital Economics’ forecast of £12.8 billion and exceeding the consensus estimate of £16.0 billion.
Higher March borrowing, combined with upward revisions to previous months’ data, pushed total public borrowing for the 2024/25 fiscal year to £151.9 billion, well above the Office for Budget Responsibility’s (OBR) March forecast of £137.3 billion.
PMI slips below forecast
The U.K.’s composite Purchasing Managers’ Index (PMI) for April showed a steeper-than-expected drop, hinting that recent disruptions linked to U.S. tariffs could weigh more heavily on the British economy than previously thought.
The index declined to 48.2 from 51.5, falling below the consensus estimate of 50.4, with both the manufacturing and services sectors posting contractions.
Company updates
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Croda International PLC (LON:CRDA) saw its shares climb over 8% after the specialty chemicals firm reported first-quarter sales that topped forecasts and maintained its full-year guidance. Revenue for the quarter ending March 31 came in at £442 million, marking an 8% annual increase and surpassing consensus expectations by 3%.
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Shares of Reckitt Benckiser Group PLC (LON:RKT) dropped more than 5% following a mixed first-quarter 2025 update. Gains in Emerging Markets and the Intimate Wellness segment were offset by weaker performance in North America and Essential Home, as well as investor concerns over the timing and valuation of upcoming divestitures.
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Hochschild Mining PLC (LON:HOCM) saw its shares plunge more than 10% in London after the company revealed that stronger-than-expected rainfall during Brazil’s wet season significantly affected production at its Mara Rosa site.
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Fresnillo PLC (LON:FRES) reported a 9.7% drop in first-quarter attributable silver production to 12.4 million ounces, including Silverstream contract contributions, sending its shares down over 5%.
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British e-commerce company THG Holdings PLC (LON:THG) said that it had turned down an unsolicited takeover offer from Selkirk, which had sought to acquire its sports nutrition brand, Myprotein. Shares closed lower.
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BP (NYSE:BP) PLC (LON:BP) shares initially rallied before closing 0.3% lower after Elliott Investment Management disclosed on Tuesday it had increased its holding in the oil and gas major to just above 5%, ramping up pressure on the company to revamp its strategy and enhance shareholder returns.
- The London Metal Exchange said Wednesday it is exploring a plan to introduce a pricing premium for sustainably produced metals. The premium would apply to LME-approved brands and recognize the added value of producing aluminium, copper, nickel, and zinc through environmentally responsible methods.
- British currency risk management firm Argentex Group PLC (LON:AGFX) confirmed on Wednesday that it was in advanced negotiations with foreign exchange and payment solutions provider, IFX payments, regarding a potential offer. Argentex suspended trading on Tuesday, citing a significant drop in liquidity. The decline was triggered by a sharp fall in the U.S. dollar’s value.
U.S. reportedly pushes for lower tariffs, eased barriers in U.K. talks
The Wall Street Journal reported late on Tuesday that the U.S. has begun outlining its terms for upcoming trade negotiations with the U.K., with a focus on reducing tariffs and other non-tariff barriers on a range of U.S. goods.
One of the main objectives for the U.S. is to persuade the U.K. to decrease its automotive tariff from the current 10% to 2.5%, according to the report.
In addition to seeking a reduction in automotive tariffs, the U.S. is reportedly urging the U.K. to ease regulations on agricultural imports, particularly beef.