US stimulus concerns sees markets slide A SURPRISE surplus in public finances and upbeat manufacturing data in the UK failed to halt a triple-digit slide in the FTSE 100 yesterday over fears that the US could end its stimulus programme sooner than expected. The heavy sell-off came despite figures from the Office for National Statistics showing the UK government recorded a better-than-expected net surplus of £11.4 billion last month, compared with a surplus of £6.4bn a year earlier. The CBI's monthly industrial trends survey also showed signs of a rebound in orders. However, Bank of England monetary policy committee member David Miles last night cast doubt on the strength of the recovery and said the Bank may have to inject a further £175bn into the UK economy through its asset purchase programme. In a speech, Miles said he was open to alternatives to buying government bonds but that he could not see any. If bond purchases were less effective than in the past, he said that simply meant more should be bought than before. Earlier in the day, it was the minutes from the latest US Federal Reserve meeting which dominated sentiment in the UK and across Europe with the FTSE100 ending the day down 103.83 points, or 1.6 per cent, at 6,291.5. Other European markets suffered even heavier falls, with the Dax in Germany down 1.9 and the Cac-40 in France losing 2.3 per cent. The minutes revealed that some members were increasingly concerned over the cost and risks involved in continuing with the $85bn (£55bn) a month programme which has driven much of the recent equity rally. A number of Federal Reserve officials think the central bank might have to slow or stop the huge programme before seeing the pick-up in employment it is aimed at achieving. Market analyst Craig Erlam from Alpari said "grumblings" over US monetary policy had turned to "real concerns" about such large scale bond buying at this month's meeting. "One thing is now clear, these purchases are likely to be scaled back sooner than we thought and it could come as early as March," he said. Although the UK public finances surplus in January represented the biggest for five years, economists fear it will not be enough to prevent the government overshooting its borrowing target and said the UK remained at risk of losing its coveted AAA debt rating. That fear had been heightened on Wednesday when the auction of 4G mobile airwaves raised £2.3bn for the Treasury, far less than the £3.5bn estimated by the Office for Budget Responsibility (OBR). Economists were split on whether Chancellor George Osborne would meet his 2012-13 deficit reduction goal when he presents latest forecasts at his Budget next month. Investec economist Victoria Clarke said she suspected Osborne would still be off track, but not by enough for him to undertake a fundamental rethink of economic policy. "On these numbers, he is going to be having a bit of a scratch around to see whether there are any extra one-off savings, as we've seen him do over recent years," she said. Manufacturers also provided some comfort for the UK economy by forecasting moderate growth in their output over the coming quarter, according to a CBI poll. Export order books also showed some improvement.