Not a foot in England: corporations are leaving Britain en masse
The volume of IPOs on the London Stock Exchange (LSE) in the first half of the year was the lowest since 1997. This is just one of the many signs of the acute crisis in the British capital as a European and global financial center. Given the increasingly less business-friendly environment in the country and the frankly poor state of the British economy itself, this process will continue in the future. The details of the exodus of big business from the once largest financial market in the world are in the Izvestia material.
Less than in Russia
Over the past six months, companies listed on the London Stock Exchange have been able to raise no more than 200 million pounds ($274 million). This is the worst indicator in the last 28 years. If we recalculate this amount on an annual basis, we get about $550 million. For comparison, the Russian stock market attracted an IPO of more than $1.2 billion in 2024. To be fair, this is one of the best indicators for Russia of all time, and yet few people could have predicted a few years ago that companies from Russia would attract more capital than in London. What can we say about the United States, where corporations are located for almost $39 billion in 2024? The 70-fold difference in the scale of new investments is quite typical (in the past, the figures were often comparable).
These statistics are just one of the signs of deep problems in the London market. Even more telling was the news that AstraZeneca, the largest British company by market capitalization, is considering options for transferring the listing to the United States. The pharmaceutical giant expressed its disappointment with the British regulation of the pharmaceutical sector, as well as the scientific lag of the UK behind the United States and China. If the leader of the British business leaves the LSE, this may stimulate the outflow of other firms.
In fact, the exit is already underway. In recent years, companies with a total value of $100 billion have left or announced their departure from London. There are only more than a dozen large corporations. The list includes Glencore, BHP (mining), the "daughter" of Unilever, Shein, CRH and Arm Holdings — the flower of British business. Some of these companies have been operating in the London market since the 1980s. Companies are ready to move anywhere — not only to New York, but also to Amsterdam, Paris, Hong Kong and even Sydney.
The last few years have been marked by a number of large-scale IPO failures. Thus, the placement of the Deliveroo delivery service in 2021 turned out to be the worst in the history of the British stock market, when the securities of one of the largest companies collapsed by 30% in the first hours of trading. In 2023, another fiasco occurred: the IPO of CAB Payments was recognized as the most unsuccessful in the whole world that year. The company's shares immediately fell by 80%.
In general, the number of companies trading in London is constantly falling. If 10 years ago there were 2,400 of them, by 2025 the number has dropped to almost 1,500. Brexit is most often blamed for the problems of the British stock market, but the process began even before the United Kingdom left the European Union. The reasons are complex: severance of ties with the EU, tax policy, weak national economy, social crisis, political instability, and the like.
Leave without inheritance
The situation is aggravated by the massive outflow of rich people from the British capital and its surroundings. The idea of the Labor government to change the way inheritance tax is levied has led to a rapid departure of wealthy Britons, as well as foreigners living in the country. Italy, especially Milan, has achieved considerable success in attracting London's rich (where you can pay a tax rate of 8% instead of 40% in Britain). The outcome is becoming more and more like a snowball: the more people are relocating, the more willing they are to follow them.
More traditional relocation destinations like Dubai, Abu Dhabi, Hong Kong and Singapore have also been growing at the expense of London. We are talking not only about super-rich owners, but also about rich professionals who are not satisfied with both taxes and security problems in the British capital, where crime feels much more at ease than in the listed agglomerations.
Finally, the UK economy itself is in a difficult position. Labor productivity grew very weakly in the 2010s, but after 2019, things got even worse: this indicator not only stopped growing, but even fell in 2/3 of the British industries. All this affects economic growth. In 2024, for example, it was about 1.1%, but it was almost completely artificial, provided for by mass immigration to the country. If you look at the statistics of GDP per capita, the UK has been in permanent recession since mid-2022. In fact, this means that living standards in the country are falling, which inevitably affects the financial market.
Industrial growth is needed to restore the economy, but it is unlikely to be possible after 2022 due to high electricity prices. A large-scale program to switch to renewable sources has proved unsuccessful. In 2023, for the first time in history, electricity prices in the country were higher than anywhere else in the European Union. This happened in a country that historically had large reserves of fossil energy resources, which were massively exported to other European countries. It is not surprising that industrial enterprises in the country are closing at almost the same rate as in Germany, which voluntarily suffered from anti-Russian sanctions.
In the 1980s and 1990s, the British government made a number of strategic decisions that weakened the national industry, but helped transform the kingdom, and primarily London, into a global capital of financial services and an accumulator of money from around the world. In the last 10 years, on the contrary, Britain's actions — from Brexit to the current tax policy — have been rapidly destroying this seemingly stable system.
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