Unlock Editor’s Digest for free
FT editor Roula Khalaf selects her favorite stories in this weekly newspaper.
Chancellor Rachel Reeves will argue on Monday that the City of London is entering a “new golden age” due to changes to tax and regulation making it easier for companies to raise money in the UK.
Following a long-running lack of listings in Britain, bankers are more optimistic about this year’s prospects and the Chancellor is keen to seize on any evidence that his effort to ease restrictions on the City is fueling a surge in activity.
In a speech at the London Stock Exchange, Reeves will hail the rise in the blue-chip FTSE 100 index above 10,000 for the first time this month and the recent flood of UK initial public offerings as signs of a revival in the country’s capital markets.
Some of the volatility in the UK market in the last few months of last year offset some of the gloom that hung over the City due to a long-running drought of IPOs and many big companies moving their listings abroad or going private.
“Two years ago, some people said the city’s best days were behind it. They were wrong,” Reeves would say. “As the FTSE 100 reaches record highs and global companies once again choose London, we are seeing the first signs of a new golden age for the city.”
Reeves will argue that the relaxation of share and bond listing rules in London, which came into force on Monday, as well as a three-year stamp duty holiday for the sale of shares in newly listed companies, is “already bearing fruit” by stimulating market activity.
Some financial analysts were skeptical that recent reforms to UK listing rules would be enough to restore the City to its former glory.
“The proposed changes to prospectus rules are welcome and reduce friction for companies looking to raise capital,” said Neel Shah, market strategist at research group Edison. “However, there are many other challenges to overcome before we can celebrate a golden age for the City of London.”
Among the reforms outlined by the Financial Conduct Authority last year, it has become easier for companies to issue debt in smaller sizes, making it more accessible to retail investors by eliminating additional disclosure requirements compared to bond issues worth more than £100,000 each.
Companies have to wait less time to complete their IPOs after the FCA reduced the period between prospectus issue and listing from six working days to three.
Another change made it easier for companies to conduct follow-on share sales by removing the requirement to issue prospectuses on secondary issues of up to 75 percent of their existing securities, up from 20 percent earlier.
“By cutting paperwork and speeding up access to capital, these reforms support the entrepreneurs, innovators and investors who drive our economy – while preserving the high standards and investor protections that make the UK one of the most trusted markets in the world,” Reeves plans to say.
Chancellor will try to spread her message about the city’s better prospects at the World Economic Forum davos Later this week she will meet political and business leaders from around the world.
Leading investment firms are pressuring the government to do more. AJ Bell, the chief executives of Hargreaves Lansdown, RetailBook and Interactive Investor, wrote to the Chancellor and the LSE urging them to include allocations for retail investors in every UK IPO, secondary fundraising and “plain vanilla” bond issue.
Last year, £2.1 billion was raised from 22 London IPOs, while 16 new listings in 2024 are expected to raise £766 million. The surge was driven by several Main Market listings in the fourth quarter, including British bank Shawbrook, LED face mask business Beauty Tech and tinned tuna seller Princes Group.
City advisers say there is a long list of London IPO candidates for 2026, including Norwegian software group Visma, Hutchison Telecoms business behind mobile brand Three and bookstore chain Waterstones.
