Gilt yields unmoved on public sector borrowing shock, tech stocks boosted by Trump interest in AI, EasyJet falls, Wetherspoons’ subdued Christmas and Trainline faces state-backed rival threat

“The bond market hasn’t panicked about UK government borrowing shooting up to £17.8 billion,” says Russ Mould, Investment Director at AJ Bell.

“While the public sector net borrowing figure was much higher than the £14.1 billion consensus estimate, the UK 10-year gilt yield was unchanged at 4.594% which implies the bond market had already priced in a punchy rise in borrowing.

“We’ve already seen big movements in gilt yields in recent weeks, but that doesn’t mean Rachel Reeves now has nothing to worry about. The pressure is on the chancellor to get public finances in order and to accelerate economic activity. Increasingly, it looks like both cannot be done in unison.

“Investors already have plenty of other things on their mind, namely what Donald Trump is going to do next. He’s made it clear that the EU is on his hit list for tariffs, but details remain thin on the ground. That’s created an underlying sense of worry for investors, but there was some good news which gave a lift to certain US stocks.

“Trump is embracing AI and said the US would see more than 100,000 new jobs created in the coming years from a multi-billion-dollar private sector investment in AI-related infrastructure. OpenAI, SoftBank and Oracle are creating a joint venture called Stargate which will build data centres to help support the roll-out of AI. US tech stocks got a boost as investors liked the fact Trump was hitting the ground running by talking up AI.

“Germany’s DAX index is enjoying quite the run so far this year, hitting another record high thanks to Adidas and Siemens Energy storming ahead and helping to make up for a pullback from Porsche after its downbeat 2025 guidance disappointed investors. Adidas cleaned up over the fourth quarter, boosting market confidence in the shoe company’s prospects. The news had positive read-across to Puma and JD Sports shares.”

EasyJet

“EasyJet’s update lacked pizzazz. Saying that current booking trends are ‘supportive’ of full-year market expectations doesn’t exactly instil confidence. It’s woolly language which doesn’t go down well with investors.

“Admittedly the airline is only one quarter into its financial year, but the market needs reassurance that everything is going swimmingly for the business given the fragile economic backdrop and weakening consumer confidence. The fact the share price fell on the update suggests investors are disappointed.”

Wetherspoons

“The latest update from Wetherspoons was solid rather than spectacular with the pubs group enjoying a more subdued festive period than some of its peers.

“This could reflect the more everyday charms of a Wetherspoons – a place to get cheap grub and drinks rather than somewhere to necessarily celebrate special occasions. In the longer term that is not a bad place for the business to be, given Christmas comes around only once a year.

“Wetherspoons points to a substantial hit from the Budget changes. It would not be a surprise to see a disproportionate impact on the business relative to other hospitality firms given the company’s pitch is all about its value credentials. This means the company has to balance the temptation to pass on higher costs with the need to ensure its prices remain attractive to punters.

“There may be disquiet in some quarters about the guidance for a modest increase in borrowings, although these remain at manageable levels and there is nothing in the statement to undermine the company’s status as a survivor in the sector.

“No release from Wetherspoons would be complete without some thoughts from founder Tim Martin and he takes aim at dinner-party-frequenting politicians for allowing a situation where VAT is charged on booze sold in pubs and restaurants but not in supermarkets.”

Trainline

“If rail ticketing platform Trainline thought the threat of a state-backed rival had disappeared entirely then it got a rude awakening with news from the Department for Transport that such a venture is still on the cards.

“First proposed under a Conservative government in 2021 and subsequently abandoned the following year, the concept is a threat to Trainline given it could offer the ability to buy tickets online without commission. It could also impact the company’s white label business where it supports third party ticketing.

“While decidedly unhelpful to the company, there are several reasons why the shares have suffered a brief jolt rather than a complete derailment on the news.

“First, this won’t happen until after the establishment of state-owned railway Great British Railways – scheduled for late 2026. It wouldn’t be a surprise to see this date pushed back given the complexity involved in renationalising rail carriers. Trainline therefore has a decent amount of time to prepare for this disruption to its market.

“Second, Trainline has established a strong brand over several years which could forge loyalty, particularly given its app and website have a good level of user functionality which might be difficult for any new platform to match overnight. The DfT itself has also said it wants to preserve a ‘strong independent retail sector.’

“Finally, Trainline has diversified beyond the UK with expansion into Europe which means its fortunes are not completely tied to its domestic market.”

These articles are for information purposes only and are not a personal recommendation or advice.