German factory prices hit record high as energy crisis deepens

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Government borrowing exceeded forecasts as soaring inflation pushes up debt service costs.

Government borrowing hit £4.9bn in July – well above the £0.2bn expected by the fiscal watchdog. This brought the total for 2022-23 so far to £55bn, £3bn more than forecast.

While tax revenues were higher, the deficit was driven by debt service charges, which jumped 81% from a year ago.

Indeed, a quarter of public debt is tied to the retail price index, which hit its highest level since 1981 last month as runaway inflation shows no sign of abating.

The figures will add pressure on Conservative leadership candidates Liz Truss and Rishi Sunak, who have both promised to cut taxes despite soaring government borrowing.

5 things to start your day

1) How the Bank of England failed to keep pace with inflation – according to its former policymakers Monetary Policy Committee veterans say it’s time to rethink how it works

2) Interest rates need to hit 6% to keep inflation under control, says founder of Bank of England rate setting Willem Buiter says policy will have to be ‘seriously restrictive’ to meet 2% target

3) Discovery offloads GB News stake as channel builds up £60m war chest The co-founders and US backer bought out the broadcaster’s latest upset from Sky News and the BBC

4) Ex-Lloyds chairman backs Truss’ plan for city super-regulator Existing financial watchdogs ‘often come into conflict or pull in different directions’, says Lord Blackwell

5) Peter Thiel’s luxury New Zealand lodge blocked by environmentalists Billionaire’s planning request denied on grounds estate would have ‘enough negative visual effects’

What happened overnight

Asian equities were left in limbo this morning as the US dollar rode all the way as the clouds of recession gathered over Europe and highlighted the country’s relative outperformance. American economy.

Added concerns over the health of China’s economy saw MSCI’s broadest index of Asia-Pacific stocks outside of Japan slipping 0.3%, only to fall 1.1% on the week.

Chinese blue chips were flat, while South Korea lost 0.5pc. The Japanese Nikkei fared better with a gain of 0.3 pc due in part to a further drop in the yen.

coming today

• Company : Apax Global Alpha (interim)
• Economy: GfK consumer confidence, public finances, retail sales (UK), inflation (Japan), producer prices (Germany)