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Today, UK Finance releases a new report analysing the current state of the UK’s capital markets. The report identifies areas that require further attention and puts forward a series of recommendations for consideration to enhance the UK’s competitiveness on the global stage.
The research, conducted by EY, is based on detailed quantitative analysis and over 100 interviews and surveys of market participants including company founders, leaders of pre-IPO companies, leaders of publicly traded companies, investors, advisers, investment managers, and infrastructure providers.
The report is being launched at an event in Canary Wharf that will feature keynote speeches from:
The event also includes a fireside chat between Lord Hill of Oareford CBE and Julia Hoggett, Chief Executive Officer of the London Stock Exchange.
This report aims to complement and inform existing and ongoing initiatives, such as those initiated by the Capital Markets Industry Taskforce (CMIT).
Current state of the UK’s capital markets
The research finds that the UK remains a top tier global capital markets centre and continues to attract global capital. Data also indicates post-IPO share performance on UK exchanges performed better than in the US between 2017 and 2021 and the UK has grown and attracted more technology companies than public discourse would suggest.
Challenges remain however, and market participants identified several areas where improvement was required
Recent reforms to UK capital markets and initiatives to support them have focused on legislative and regulatory changes. These contributions have been crucial, but the research identifies additional factors which impact decisions around listings and the deployment of capital that are equally important and require attention. The report makes recommendations grouped under four key themes, including:
The full list of recommendations can be found in Chapter 6 of the report.
Conor Lawlor, Managing Director of Capital Markets and Wholesale at UK Finance, comments:
The UK is incredibly fortunate to have all the raw ingredients and key pillars for successful global capital markets. The progress from the regulators and policy makers on reform to date has been fantastic in enhancing those fundamentals. Our research however identified several areas that need to be addressed to arrest the negative trends that are developing amongst participants within our markets. We need more UK growth capital to support our economy, better understand the benefits of taking risk for future reward; further improve the frictions in our markets through digitisation and begin to champion our entrepreneurs and celebrate our successes.
The UK is incredibly fortunate to have all the raw ingredients and key pillars for successful global capital markets. The progress from the regulators and policy makers on reform to date has been fantastic in enhancing those fundamentals.
Our research however identified several areas that need to be addressed to arrest the negative trends that are developing amongst participants within our markets.
We need more UK growth capital to support our economy, better understand the benefits of taking risk for future reward; further improve the frictions in our markets through digitisation and begin to champion our entrepreneurs and celebrate our successes.
Axe Ali, EMEIA Financial Services Head of Private Equity & Venture Capital at EY, comments:
The UK is internationally renowned for offering high quality and deep capital markets and gold-standard governance, bringing numerous benefits to the local and global economy. However, as many traditional strengths are challenged by everchanging macro-economic and geo-political factors, and the needs of companies and investors adapt and evolve, we are at an inflection point of change. There is clear momentum across the industry, and a need to collaborate and strengthen the global positioning of UK as a leading capital market. This research is an important step in understanding the challenges facing the market to inform future initiatives.
The UK is internationally renowned for offering high quality and deep capital markets and gold-standard governance, bringing numerous benefits to the local and global economy. However, as many traditional strengths are challenged by everchanging macro-economic and geo-political factors, and the needs of companies and investors adapt and evolve, we are at an inflection point of change.
There is clear momentum across the industry, and a need to collaborate and strengthen the global positioning of UK as a leading capital market. This research is an important step in understanding the challenges facing the market to inform future initiatives.
The full report can be found here.
For more information, please call the UK Finance press office on 020 7416 6750 or email press@ukfinance.org.uk
UK Finance is the collective voice for the banking and finance industry. Representing more than 300 firms across the industry, we act to enhance competitiveness, support customers and facilitate innovation.
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