Optimism is growing over UK equity capital markets again, with large issuers eyeing London IPOs – good news for Chancellor Rachel Reeves ahead of her Mansion House speech this week.

One of the most positive headlines in recent weeks regarded sponsor Hg moving to list its Nordic software business Visma on the London Stock Exchange (LSE) next year.

While this is a 2026 deal at the earliest, there might be some nearer-term positive news for London. Greek energy and industrial business Metlen eyes a London listing next month.

Alongside big international names, there are several UK champions – like fintech and neobank players Monzo and Revolut – which have also been talked about as London IPO candidates, although the latter was previously reported to favour a US listing.

“There is a lot happening,” said one UK ECM advisor. “We have a big queue of businesses seeking to list in London. We have several clients preparing for IPOs for 2026 and some through to 2027,” he added.

Several other sources have confidently told the ECM Pulse that the second half of the year, through to 2026, could see the emergence of a London IPO revival.

Reform and reputation building

The LSE has long existed under something of a cloud, driven primarily by a downgrade in sentiment on the UK as an investment and capital markets hub following its decision to leave the European Union in 2016.

“There was a political perception that needed to be overcome around London,” said the UK advisor. “Brexit was the primary reason behind a growing negative perception – you can’t deny it.”

This led to London moving from being the default alternative listing venue to the US “to one of many, be it Amsterdam or another European exchange,” he added.

But the advisor noted that this has now begun to change.

There has been a carrot and stick phenomenon in the changing perception around London. By way of a carrot, the UK has undertaken a vast array of listing and capital markets reforms to make listing in London easier. The new rules also aim to make operating as a public company less burdensome once a company has listed on the exchange.

The stick is also ironically around negative political perception – but this time directed towards the US, which looks like an increasingly uncertain listing and regulatory destination early in President Donald Trump’s second term.

As previously covered in this column, Trump’s re-election caused some UK and European issuers to forgo the perceived valuation uplift of a US listing, in favour of regulatory certainties and predictability in Europe.

For corporates without a significant presence in one European market, London – the largest and most established equity capital market in Europe – has regained much of its allure.

“We used to have conversations with companies looking at US listings, trying to rationalise the US,” said a second advisory source. “Now we are having similar discussions around London.”

Alongside regulatory tweaks to the existing IPO pathway, there has also been innovation. The UK government’s PISCES initiative will allow private companies to join a market exchange which allows regular liquidity events, providing a framework for the private IPO trend we have been covering for some time, and supporting easier pre-listing financing.

The LSE’s Private Securities Market will operate under the PISCES framework.

A third UK ECM insider noted hopes PISCES will keep the UK’s best businesses in the country, rather than seeing them conduct late-stage financing with international venture capital firms that then push for a US listing as a final exit option.

It has been reported that Revolut itself, alongside other high-growth UK businesses like Octopus Energy and OakNorth Bank, are among several pre-IPO businesses being wooed to join the new exchange.

Stay on message

Against this positive backdrop, all eyes will be on Rachel Reeves’ Mansion House speech tomorrow (15 July). Connoisseurs of this regular fixture in the economic calendar will be looking not only for news on plans to beef up the flow of pension fund cash into London-listed stocks but also hints as to Reeves’ fiscal planning ahead of the autumn Budget.

Senior Labour figures have been engaged with the City since the party was in opposition and have a genuine belief in capital markets as an engine to drive their economic growth agenda, the third advisor said.

Reeves will consequently be addressing an audience that is arguably more hopeful of a UK equity market turnaround than any chancellor has addressed since Brexit entered the lexicon.

Yet the UK’s rocky fiscal position could still spoil the party.

Reeves will deliver her speech after an embarrassing – and expensive – climbdown for the government on welfare reform, and hot-on-the-heels of a mini gilts run following an appearance in the House of Commons in which she seemed visibly upset. A gloomy fiscal outlook report from the Office for Budget Responsibility last week added to a widespread sense that Reeves will need to substantially raise taxes in the autumn.

One measure put forward by Labour grandee Lord Kinnock is a wealth tax on assets over GBP 10m. Fearing the appearance of giving a running commentary on fiscal policy, last week, government officials did not deny interest in the idea to the satisfaction of Westminster reporters covering the run-up to the Budget.

The proposal, potentially severe in its ramifications and vague in its scope, sent financial professionals and independent bodies into a frenzy.

The UK’s independent Institute for Fiscal Studies was negative in response. Saying that it was “difficult to make the case that an annual tax on wealth would be a sensible part of the tax system even in principle,” and adding that such a tax would “penalise saving and investment”.

Britain’s entrepreneurial class also took to social media platforms to ponder how this might impact equity raising in the UK, with the owner of any business valued at over GBP 10m on paper potentially subject to taxation under a wealth levy.

As this news service wrote last week, the proposal flies in the face of the pro-business, pro-growth agenda the government is keen to promote.

When Reeves takes to the stage tomorrow, she would do well to remember that the eyes of capital markets will be on her. It has taken considerable time and effort to rebuild the UK’s reputation as an attractive investment hub.

Just as it appears on the brink of success, the government must be careful not to let politics ruin it again.