UK investment bank Peel Hunt has offered a supportive assessment of Chancellor Rachel Reeves's recent Budget, describing its measures to bolster the London stock market and encourage investment in British companies as "positive steps".
Budget Measures Aimed at Revitalising Investment
The bank specifically welcomed key announcements from the fiscal statement, delivered last week. These include a three-year stamp duty holiday on shares purchased in new UK initial public offerings (IPOs) listed in London. Furthermore, the Chancellor unveiled adjustments to Individual Savings Account (ISA) rules, lowering the permitted cash holding to £12,000 and redirecting the remaining £8,000 allowance into stocks and shares investments.
Steven Fine, Chief Executive of Peel Hunt, stated: "The second half has started strongly, with the group continuing to play leading roles across both mergers and acquisitions and equity capital markets mandates."
Clarity for Businesses and Investors
In its response, Peel Hunt noted that the Budget provided much-needed clarity after extensive pre-announcement speculation. "Following a prolonged period of pre-Budget speculation, businesses and investors now have greater clarity from which they can start to plan," the bank said. It added that the key measures were generally well-received, particularly the creation of additional fiscal headroom against the Chancellor's self-imposed rules.
The initiatives, alongside a published paper on entrepreneurship, are seen as moves "toward enhancing the UK’s attractiveness for growth businesses and long-term investors."
Market Activity and Financial Performance
Peel Hunt reported signs of a revival in the London IPO market this autumn, although activity in its first half to September 30 remained subdued. Recent listings include The Beauty Tech Group, lender Shawbrook, and tinned fish firm Princes. Meanwhile, broader deal activity "continued at pace," with 60 transactions announced and 10 active bids for FTSE 350 companies by the end of September.
The bank's own half-year results showed a significant recovery. Pre-tax profits surged to £11.5 million for the six months to September 30, up dramatically from £1.2 million a year earlier, as revenues climbed 38.3%. This performance comes amid a cost-saving drive that has reduced its workforce by nearly 10% since March, cutting underlying fixed costs by around £5 million annually.
The Chancellor's Budget, however, was not without controversy. Reeves has faced criticism over claims she misled voters about the scale of the fiscal challenge prior to announcing £26 billion in tax rises. A notable increase was a 2% rise in dividend tax for basic and higher rate taxpayers next year, a move some experts argue contradicts the drive to increase investment in Britain.
