Daily market update: FTSE 100 ticks higher in early trading, UK government borrowing, Nike

The FTSE 100 ticked higher in early trading after lower-than-expected inflation in the US helped lift shares on Wall Street and across Asia overnight.

The knife-edge nature of yesterday’s rate decision by the Bank of England is keeping UK stocks in check and stalled the FTSE 100’s push towards the 10,000 mark. Investors have responded to the reality that we could be approaching the end of the current rate-cutting cycle.

This saw housebuilders lose momentum as hopes for a significant drop in mortgage costs in the coming months begin to fade away. An unexpected drop in retail sales only added to the gloom around the consumer backdrop in the UK. 

Across the Atlantic, the sharply lower-than-anticipated CPI reading in the US suggests the Federal Reserve might have more scope for rate cuts next year. A resulting fall in precious metal prices, often seen as a hedge against inflation, saw two of the UK stocks which have shone the most in 2025 – Fresnillo and Endeavour Mining – on the back foot.

Public sector finances

The impact of government policy choices and U-turns was clearly evident in the latest set of public sector finances.

Changes to employer National Insurance helped net the Treasury an additional £3 billion in November but an additional £1.8 billion has been shuffled to the minus column for the financial year after the government ditched its unpopular winter fuel policy. 

There was other good news to help keep borrowing below last November’s figure as higher wages also meant more income tax flooding in and falling inflation pushed down borrowing costs to the lowest level for the month for six years.

Finding ways to balance the books isn’t easy and rarely popular as an ageing population and rising unemployment adds to the demand on the public purse. Whilst November’s borrowing is the lowest since 2021 it’s still above where economists had expected it to come in and significantly higher than the OBR had forecast in March.

Nike

Nike CEO Elliott Hill always framed the company’s recovery as a marathon not a sprint when he returned to the business a year or so ago – after this latest update the market is clearly worried it is hitting a wall.

China has been an important part of Nike’s growth story over the last decade or more but the company’s recent struggles there are deepening. The drop in sales in this market is alarming investors despite the company beating expectations overall.

In fairness Hill is not hiding away from the company’s problems in this market – acknowledging the need to clear unsold inventory, invest in its outlets and attempt to master what is an extensive and complex ecommerce market. 

Performance in other markets is more encouraging but the company still faces a real fight to stay ahead of upstart brands like On and Hoka. Hill has put restoring Nike’s athletic credentials at the heart of his strategy so he can expect to be judged on his success or failure in this area.

The continuing struggles with Converse raise questions about whether it is worth the brand remaining a part of Nike’s stable.