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(Sharecast News) - There are no FTSE 350 corporate releases due on Friday, but investors will turn their attention to the latest UK borrowing and retail sales figures for May.
Michael Hewson at MCH Market Insights noted that the April set of public sector borrowing numbers were both "ugly in the extreme, highlighting the parlous state of the UK public finances, as well as the UK consumer".
Public sector borrowing rose by 25% in April to 24.3bn, and was the worst monthly number since September 2020. The number was driven higher by a 2.7bn increase in social benefits, while debt interest payments hit a record high of 10.3bn, with rising political risks cited as one reason for the big surge in this area, Hewson said.
As far as retail sales are concerned, he said: "As we look to the upcoming May numbers, we could well see a modest recovery from the gloom in April, due to the two Bank Holidays during the month, as well as the warm weather, as well as half term break, that prompted consumers to go out and spend."
Also on docket will be the GfK consumer confidence index for June.
Politics will be in focus, with the result of the Makerfield by-election due to be confirmed on Friday and Labour's Andy Burnham on course to win and launch a leadership challenge against Prime Minister Keir Starmer.
This could lead to a period of political uncertainty that could unnerve gilt markets, said Neil Wilson, UK investor strategist at Saxo Markets.
Michael Hewson said that given Burnham's recent comments about being in hock to the bond markets, his winning of the seat could prompt a sell-off in the gilt market as investors fret about the prospect of what might happen when it comes to future government spending commitments.
"Bond markets have already shown that they are nervous about the low calibre of many Labour MPs, when it comes to economic literacy, and any indication that a new Chancellor of the Exchequer might look to relax further the so-called fiscal rules is unlikely to be well received by the markets," he said.
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