KUALA LUMPUR, April 3 (Bernama) -- Bursa Malaysia closed marginally lower on Friday, as cautious sentiment persisted, with investors remaining on the sidelines amid ongoing conflicts in West Asia, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 2.80 points, or 0.16 per cent, to 1,695.50 from Thursday’s close of 1,698.30. The benchmark index opened 5.82 points higher at 1,704.12, and moved between 1,693.65 and 1,708.12 throughout the day. However, market breadth remained positive, with gainers outnumbering losers 634 to 415, while 521 counters were unchanged, 1,077 untraded and 10 suspended. Turnover improved to 3.38 billion units worth RM2.95 billion from yesterday’s 3.20 billion units worth RM3.50 billion.
The UK government reported a smaller-than-expected budget deficit in November, offering a brief respite for Finance Minister Rachel Reeves, who faces mounting challenges to balance public finances amid a slowing economy and rising inflation.
Key November Borrowing Figures
- Public Sector Net Borrowing:
- £11.249 billion, lower than the £13 billion forecast by economists polled by Reuters.
- A £1.8 billion reduction in inflation-linked debt compensation due to a 0.3% fall in the retail price index(RPI) in September helped narrow the deficit.
Year-to-Date Borrowing
- April–November 2024/25 Financial Year:
- Borrowing totaled £113.2 billion, similar to the same period in 2023/24.
- Despite November’s improved figures, borrowing has exceeded expectations in eight out of 11 months in 2024.
Challenges Ahead for Reeves
Fiscal Rules Under Strain:
- Reeves pledged to balance day-to-day spending with tax revenues by the end of the decade.
- Plans include significant borrowing for public services and infrastructure investment, diverging from previous Conservative policies.
Economic Headwinds:
- Zero GDP Growth: The Bank of England predicts stagnation for Q4 2024.
- Rising Inflation: Recent upticks could drive higher borrowing costs.
- Alison Ring of ICAEW warns that "money remains extremely tight and that is unlikely to change any time soon."
Tax Increases:
- Reeves’ budget announced the largest tax hikes in three decades, primarily through higher employer social security contributions, to stabilize public finances.
Revised October Borrowing Data
- October’s borrowing was adjusted upward by £800 million, highlighting ongoing volatility in fiscal metrics.
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