UK inflation figures: A turning point for IPOs?

Yesterday’s inflation data brought some much-needed optimism to the UK’s economic outlook. After two months of rises, official data showed that inflation eased 2.5% in December, sparking hopes of interest rate cuts later this year. This news, coupled with signs of stability in global markets, could pave the way for a long-awaited resurgence in UK IPO activity.

 The last two years have been challenging for companies considering a public listing. Rising interest rates, economic uncertainty, and global competition have contributed to a significant slowdown in IPOs on the London Stock Exchange. However, with inflation easing and a potential pivot in monetary policy, market conditions may finally shift in favour of listings. 

Analysts suggest sectors such as technology, healthcare, and clean energy are particularly well-positioned to capitalise on this renewed market confidence. Additionally, the UK government’s recent efforts to reform listing rules and enhance competitiveness in capital markets might further bolster IPO activity.

Talk in the City is that the second half of 2025 could see a notable rebound for London IPOs with a strong pipeline taking shape. There is said to be growing interest from companies outside of the UK that might have previously considered a US listing but are wary of Trump's America forst rhetoric. 

Of course, the global context remains crucial. While UK markets show promise, competition from the US and Asia remains fierce, and there is plenty of scope for geo-political instabilities to upend the markets. For now, though, some welcome good news and a glimmer of hope that London may once again become the global hub for ambitious, entrepreneurial companies seeking to go public.