UK IPO Slowdown: What’s Stalling London’s Public Listings?
London, once a magnet for global initial public offerings (IPOs), is currently facing a troubling slowdown in its public listings. The number of companies choosing to float on the London Stock Exchange (LSE) has dropped significantly in recent years, prompting concern among investors, regulators, and government officials. What’s behind this trend, and can the UK reclaim its status as a global IPO hub?
A Steep Decline
The numbers paint a stark picture. In the first half of 2025, London saw only a handful of IPOs, a far cry from the robust activity seen in 2021 and even parts of 2022. According to the LSE, funds raised through IPOs are down more than 60% compared to pre-pandemic levels. And while global markets have experienced their own slowdowns due to rising interest rates and inflationary pressures, London appears to be underperforming its peers, especially New York and some Asian markets.
Economic Uncertainty and Interest Rates
One major factor contributing to the UK IPO slowdown is ongoing economic uncertainty. While inflation has cooled somewhat in 2025, the Bank of England’s cautious approach to interest rate cuts has kept borrowing costs relatively high. This has discouraged growth-stage companies from going public, as they face tighter financial conditions and uncertain investor appetite.
Additionally, concerns over the UK’s long-term economic trajectory post-Brexit remain a lingering drag on investor confidence. Some companies, particularly in tech and biotech, are now opting for New York over London due to deeper capital pools and higher valuations.
Regulatory Challenges
Regulation is another sticking point. Critics argue that London’s listing requirements are too rigid, particularly for fast-growing, founder-led companies. The Financial Conduct Authority (FCA) has proposed reforms aimed at making the UK market more attractive, including allowing dual-class share structures in the premium segment and streamlining the prospectus regime.
However, some of these reforms have been slow to take effect, and the uncertainty around regulatory changes has made some firms wary. By contrast, the U.S. markets continue to offer more flexible structures and clearer guidance, making them more appealing for international firms looking to IPO.
The ARM Wake-Up Call
One of the most symbolic blows to London’s IPO aspirations came in 2023, when UK chip designer ARM opted to list in New York despite government lobbying. The move was widely seen as a missed opportunity to showcase the London market’s relevance in the tech space. ARM’s decision sent a message to other ambitious British companies that the City may no longer be the most strategic venue to raise capital.
What’s Next?
To reverse the trend, the UK government and regulators must accelerate reforms and provide clear incentives for companies to list domestically. Proposed changes under the “Edinburgh Reforms” and the Chancellor’s push for pension fund investment in UK equities are steps in the right direction, but results have yet to materialize.
The future of London’s IPO market hinges on restoring confidence, improving competitiveness, and aligning with the global financial environment. Until then, London’s public listing drought may continue—risking long-term implications for the UK’s standing in global finance.
Published: 15th September 2025
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