Chancellor Rachel Reeves has declared that a series of reforms to UK listing rules are set to "reinvigorate" the City of London, pointing to a significant revival in initial public offering (IPO) activity and renewed investor confidence.
Reforms Spark IPO Revival
Speaking at an event in London's Square Mile on Monday, the Chancellor directly countered past pessimism about the UK's financial hub. "Two years ago, some said the City’s best days were behind it. They were wrong," Reeves stated. She attributed the turnaround to regulatory changes implemented by the Financial Conduct Authority (FCA) that cut red tape for companies seeking to list in London.
The key reforms have halved the time between the publication of listing documents and the IPO itself. "By cutting paperwork and speeding up access to capital, these reforms back the entrepreneurs, innovators and investors who drive our economy," Reeves added. The package also includes a new initiative to allow smaller-value bonds to be issued more broadly, making it cheaper and quicker for firms to raise funds.
FTSE Milestone and Retail Investment Push
Reeves also highlighted the FTSE 100's milestone performance as a catalyst for broader market engagement. The index surpassed 10,000 points earlier in January, following a 21.5 per cent rise in 2025 – its largest annual gain since 2009.
The Treasury hopes that simpler listing rules, combined with a three-year stamp duty holiday on new IPOs, will significantly boost participation from domestic retail investors. This strategy aims to channel the optimism from the blue-chip index's performance into wider investment in new market entrants.
Analysts See Momentum Amid Selective Caution
The regulatory changes land as London experiences its strongest period for IPO activity since 2021. A late 2025 flurry saw Princes Group and Shawbrook Bank raise £400m and £348m respectively. This contributed to total IPO proceeds in London reaching £1.9bn from 11 deals.
Vhernie Manickavasagar, PwC’s UK IPO leader, confirmed: "London has delivered its strongest year for IPO and listing activity since 2021. Momentum is set to continue into 2026, with a robust pipeline of large-cap IPOs expected." Scott McCubbin of EY-Parthenon noted the final quarter's surge was "notable, with postponed floatation plans moving ahead amid stabilising market conditions."
However, analysts caution that investor appetite remains highly selective. Dan Coatsworth, head of markets at AJ Bell, pointed out that while the FTSE 100 posted robust returns, new London IPOs delivered an average return of -3.3 per cent last year, indicating continued wariness. Investors are favouring firms with clear profitability and resilience.
Looking forward, London's market aims to capitalise on anticipated fintech floats, major retail IPOs, and sustained policy reforms to strengthen its competitive position against international rivals.
