Those readers who are down-beat about the London capital markets’ prospects in the near to mid-term can find ample expert opinion and examples of companies that are leaving London to back up their point of view. Similarly, those who like me have faith in the market can point to investment heavyweights that publicly back London and a pipeline of potential IPOs to support their predictions for a market renaissance.
The back and forth of contradictory information about whether the market is on the brink of a boom or a decline has become a persistent noise for many, and the lack of clarity is unhelpful and doesn’t get companies, their management teams and advisors any further forward.
There is anecdotal evidence that company owners and entrepreneurs that have chosen not to list in London have done so partly because of a perception that the UK Government is anti-wealth creators, despite its pro-business rhetoric. That policies such as increased National Insurance Contributions for employees, VAT on private school fees and potentially medicine, too, and the non-dom rule changes are evidence that wealth-creators are not valued, and have chosen to list their companies in other EU markets instead.
If true, that would be most unfortunate and worrying. The Chancellor needs to clarify her position with consistent policies that back up the Government’s pro-business talk. This Autumn’s Budget will provide an opportunity for the Chancellor to reinforce the UK’s commitment to entrepreneurs and their investors.
In the meantime, it is very difficult for company management teams and their advisors to confidently chart a course towards an IPO or additional fund-raising. However, there are some independent data sources providing indications about the economy and the markets. On their own, the information they provide may be taken with a pinch of salt, but taken together and over time, they provide much needed clarity about the future direction of the economy:
- Interest rates are on the way down. In August, the Bank of England’s Monetary Policy Committee announced a 0.25% cut to 4%, down 1.25% since the same time last year. While predictions say that the rate may remain flat or even rise slightly in the future, there is a consensus that the rate will continue to fall in the mid-to-long term.
- Foreign Direct Investment into the UK was less in 2024 than in previous years, but the country remains attractive according to numerous studies and reports which rank it second in Europe. The City of London Corporation’s annual analysis of FDI in the financial and professional services sector published in May, found that the UK was Europe’s top destination by projects and investment value, and the third globally.
- Lloyds Bank’s business barometer at the end of July indicates that UK business confidence is at its highest level in 10 years. The Office of National Statistics’ Business Insights and Conditions Survey showed more respondents believing that their business’s performance would increase over the next 12 months (17.7%) than decrease (14.9%), (although the CBI Industrial Trends Survey is less rosy, with more manufacturers thinking that output would decrease over the next three months than increase).
- At the end of May the IMF upgraded the UK’s growth forecast for 2025 to 1.2%, saying that “an economic recovery is underway”. Although the UK’s quarterly GDP slowed in the three months to June according to the ONS (expanding by 0.3% compared to 0.7% in the first three months of the year), it is still better than expected in view of the new tariffs imposed by the USA globally; and the FTSE 100 has hit a series of record highs in 2025.
These statistics might give some form of confidence that things are slowly starting to get better. In the midst of all the indecision about the market’s future prospects, companies and their advisors should hold fast to the more dependable predictions about the economy and look forward to the final months of 2025 with cautious optimism.
This article was originally published in the August 2025 Corporate Advisers Rankings Guide. For more information, please contact Joseph Archer.
