UK Dealmaking plunges into Historic Low Confidence in 2025
The UK’s financial markets are experiencing a significant downturn in 2025, marked by declining IPO activity and a softening mergers and acquisitions (M&A) landscape. european IPO proceeds for the first half of the year totaled €4.0 billion, a significant drop from the €11.5 billion raised during the same period in 2024. In the UK specifically, M&A deal value reached £57.3 billion – a 12.3% decrease year-on-year – with transaction volume also falling by 19.1% to 1,478 deals.
This downturn is reflected in a new study by CIL, revealing a “historic crisis in confidence” amongst UK dealmakers.Polling over 100 industry stakeholders, including private equity firms and financial advisors, the survey found a dramatic shift in sentiment.Only 13% of respondents now hold a positive outlook for the UK economy over the next 18-24 months, a stark contrast to the 48% who felt optimistic in 2024. Negative sentiment has surged from 16% last year to 57% in 2025.
Despite expectations of macroeconomic stability following a recent election, dissatisfaction with the current government’s policies is a key driver of this pessimism. A significant 72% of respondents believe the administration, led by Prime Minister Keir Starmer, is not effectively navigating challenges like the US’s increased tariffs – a record low rating even compared to periods of political and economic turmoil like Brexit and the pandemic.
While long-term optimism remains positive, it has also hit a record low, with 40% of dealmakers expressing a favorable outlook. The future of deal activity is viewed with increasing tentativeness; 53% anticipate an increase in M&A over the next 12 months, compared to 76% in 2024.Perceived asset quality remains relatively stable,but overall sentiment regarding future activity has cooled.
Alex Marshall, senior partner at CIL, summarized the findings, stating, “This year’s results demonstrate a marked decline in confidence. Pessimism regarding the long-term economic outlook is at a record high, dissatisfaction with government policy is unprecedented, and deal activity remains sluggish. Despite some positive factors like pent-up demand and stable credit markets, the dominant sentiment is one of disappointment, as stability has yet to materialize.”
