The new government is under pressure to reform London’s moribund stock markets.
Failure to do so could jeopardise the party’s UK-wide growth agenda, experts say.
Steven Fine, chief executive of investment bank Peel Hunt, said: “The London stock market doesn’t just serve one small borough of the capital. It’s an engine room for our entire economy, connecting the funds of savers and investors with businesses to generate the growth capital the UK desperately needs.”
The London market is at risk of being depopulated as foreign investors buy up British companies and local firms are attracted to listing on the New York Stock Exchange.
Alex Baldock, director of electronics chain Currys, said: “It’s been a tough two years for UK stocks and if you’re a British company it’s felt like you’re riding an escalator. Stamp duty on shares should be scrapped and Labour should look at ways to encourage pension funds to invest more in Britain.”
Cloudy vision: New government under pressure to reform London’s moribund stock markets
Fine wants Labour to build on commitments made at Mansion House by former chancellor Jeremy Hunt to encourage pension funds to invest in high-growth companies.
He wants pension funds to be required to disclose how much they invest in British companies. Currently, British shares make up just 4 per cent of British pension fund portfolios. Calls for Labour to boost the Square Mile come amid alarming data showing that London has fallen behind the stock markets of Greece, Turkey and Korea in terms of share prices.
Figures compiled by the London Stock Exchange Group (LSEG) showed it ranked 25th in the world for money raised through initial public offerings (IPOs) in the first half of 2024.
Debut companies have raised just £290m in Britain this year, a paltry figure compared with the £8.5bn raised on the New York Stock Exchange or the £4.3bn raised on the Nasdaq.
An LSEG spokesperson said: “The UK is the third largest country in the world in terms of total equity capital raised, with over £17bn raised so far this year, and more than three times as much capital has been raised in London than on the next largest European exchange.”
Money for the elections
