This was scarcely mood music the Labour government would have chosen before a make-or-break fiscal event which it hoped, despite damaging speculation in the past few weeks, might still be enough to woo entrepreneurs and investors to the UK.

In this week’s episode of Dealcast, Mergermarket Global Commentary Editor John West sits down with London-based BCLP private equity partner Perry Yam to unpack the UK Budget’s impact on the British sponsor scene.

What should private equity make of a tax-raising Budget that provided comfort to sovereign bond markets but dwelt little on supply side reforms or innovation?

Having raised taxes by GBP 26bn, Reeves hopes her Budget will bear down on inflation, provide a smooth runway for the Bank of England to continue cutting rates, and put concerns over her fiscal headroom to bed. But lifting the national minimum wage, increasing business rates, and allowing fiscal drag to eat away at higher earnings may impact corporate profitability and dent consumer confidence.

“It was a very political Budget,” Yam says – focused more on managing Labour backbench dissent than identifying and pulling growth levers that could get GP capital to work.

In a wide-ranging conversation, Yam assesses the chancellor’s reforms to Venture Capital Trusts and the Enterprise Investment Scheme, runs the rule on corporate valuation gaps between a higher-tax UK and the US, and weighs up the UK’s energy policy and its impact on AI investment opportunities.

He also throws scepticism on London IPOs as a reliable sponsor exit route and opens up on the 2026 prospects for exits from 2020 and 2021 private equity buyouts following the Budget.

Yam also talks bullishly about the rise and rise of continuation vehicles as a sustainable source of liquidity and reinvestment opportunities for LPs.

All this and more in this week’s Dealcast.