Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Chancellor Rachel Reeves on Monday will argue the City of London is entering a “new golden age” thanks to changes in tax and regulation that smooth the path for companies to raise money in the UK.
After a long-running dearth of UK listings, bankers are cautiously more optimistic about the prospects for this year and the chancellor is keen to seize on any evidence that her push to ease restrictions on the City is leading to a pick-up in activity.
In a speech at the London Stock Exchange, Reeves will hail this month’s rise in the blue-chip FTSE 100 index to more than 10,000 for the first time and a flurry of recent UK initial public offerings as signs of a revival in the country’s capital markets.
A handful of UK market flotations in the final few months of last year dissipated some of the gloom hanging over the City caused by a long-running drought of IPOs and several large companies moving their listings overseas or going private.
“Two years ago, some said the City’s best days were behind it. They were wrong,” Reeves will say. “As the FTSE 100 reaches record highs and global firms once again choose London, we are seeing the first signs of a new golden age for the City.”
An easing of rules for share and bond listings in London that come into force on Monday, as well as a three-year stamp duty holiday for sales of shares in newly listed companies, were “already bearing fruit” by encouraging market activity, Reeves will argue.
Some financial analysts were sceptical that the recent reforms to UK listing rules would be enough to restore the City’s former glory.
“The proposed changes to the prospectus rules are welcome and reduce friction for companies looking to raise capital,” said Neil Shah, market strategist at research group Edison. “There are, however, many other challenges to overcome before I would hail a golden age for the City of London.”
In reforms outlined by the Financial Conduct Authority last year, it is simpler for companies to issue debt in smaller sizes, making it more accessible for retail investors, by scrapping extra disclosure requirements compared to issues of bonds worth over £100,000 each.
Companies also have to wait less time to complete their IPOs after the FCA cut the period between issuing a prospectus and listing from six working days to three.
Another change made it easier for companies to do follow-on share sales by removing the need to issue a prospectus on secondary issues of up to 75 per cent of their existing securities, up from 20 per cent previously.
“By cutting paperwork and speeding up access to capital, these reforms back 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.
The Chancellor will seek to spread her message about the City’s improved prospects at the World Economic Forum in Davos later this week, where she will meet political and business leaders from around the world.
Leading investment companies are pushing the government to do more. The chief executives of AJ Bell, Hargreaves Lansdown, RetailBook and Interactive Investor wrote to the chancellor and the LSE urging them to require every UK IPO, secondary fundraising and “plain vanilla” bond issue to include an allocation for retail investors.
Last year, there were 22 London IPOs raising £2.1bn, up from 16 new listings raising £766mn in 2024. The rebound was thanks to 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 much longer list of London IPO candidates for 2026, including Norwegian software group Visma, the Hutchison telecoms business behind mobile brand Three, and the bookstore chain Waterstones.