Bond yields held steady despite government borrowing rising more than expected in December, hitting the highest level for the month for four years.

Borrowing came in at £17.8bn last month, £10.1bn more than in December 2023, the Office for National Statistics (ONS) said.

“The bond market hasn’t panicked about UK government borrowing shooting up to £17.8 billion,” said 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 [Chancellor] 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.”

Spending on public services, benefits, and debt interest were all up on the year, the ONS said, while an increase tax take was offset by a cut to National Insurance by the previous government.

The increased borrowing comes after interest rates paid on government debt surged earlier this month before falling back.

Darren Jones, Chief Secretary to the Treasury, said the government would “root out waste to ensure every penny of taxpayer’s money is spent productively”.

“Economic stability is vital for our number one mission of delivering growth,” he added.

London’s FTSE 100 broke a new intra-day record only to end the day down by a whisker, off by just 3.16 points at 8,545.

US stocks rose, with the S&P 500 finishing just under a record high, as the tech sector rose on the back of Donald Trump’s artificial intelligence joint venture Stargate.

The Dow Jones rose 0.3%, the Nasdaq jumped 1.3% to top the 20,000 mark for the first time this year, while the S&P 500 gained 0.6% to 6,086.37, its highest close since hitting 6,090.27 on the 6 December.

Shares in pubs chain JD Wetherspoon edged 1.24% lower after it said the government’s hikes in taxes and wages will add £60 million to costs from 1 April.

The company said like-for-like sales in the 25 weeks to 19 January rose by 5.1% on a year ago and bar sales were up by 4.5%.

The company expects Interest costs for FY25 to fall to about £47 million from £53m last time.

It plans nine pub openings this year, six have been sold over the past year, giving to rise to a cash inflow of £4.1 million. The company currently has a trading estate of 796 pubs.

Chairman Tim Martin once again called for greater parity for pubs and supermarkets, with the latter not paying VAT.

Shares in EasyJet dropped 4.19% despite the budget airline reducing its operating loss in its first quarter as fuel costs ease and demand for travel and its holiday packages rises.

The operating loss came in at £40m for the three months to 31 December, compared with £117m a year earlier.

“Looking to this summer, we have seen continuing demand for easyJet’s flights and holidays where we have one million more customers already booked, with firm favourites like Palma, Faro and Alicante,” the carrier’s new CEO Kenton Jarvis said in a statement.

Mr Jarvis stepped up from finance chief after the retirement this month of Johan Lundgren.

Easyjet said it expects its package holiday business to grow about 25% from the previous year. Current booking trends were supportive of it meeting market expectations for pretax profit of £709m.

despite reporting a halving of year-on-year losses in the first quarter and a 13% rise in revenue to £2.04bn.