City dealmaking weighed down by Budget uncertainty, says bank

Investment bank Peel Hunt has said finance deals activity has slowed in recent weeks, amid uncertainty around the upcoming autumn Budget and the US election.

The finance firm said the effect was marked enough to keep its own income forecasts in check, despite rising revenue in the first half of the year.

It said in a statement on Tuesday: “Market activity has slowed again in recent weeks ahead of the upcoming Budget and US election.

“Consequently, despite better first-half revenues, we expect full-year performance to be in line with market expectations and we remain well positioned across all parts of our business to take advantage of increased activity when market confidence returns.”

Peel Hunt said revenue rebounded to £53.3 million for the six months to September 30, up from £42.7 million in the same period last year.

“Our performance reflects a more positive macroeconomic backdrop, together with success in completing M&A financial advisory mandates for our clients during the period,” Peel Hunt said.

The finance sector is bracing for expected tax rises at Labour’s upcoming Budget, after Chancellor Rachel Reeves warned of “tough decisions” at the spending review.

Some of the mooted tax rises have included an increase in capital gains tax, which is charged on the profit made from selling assets that have grown in value, such as investments, which could hit finance firms.

Meanwhile, Peel Hunt, which advises on stock exchange listings among other things, is looking at a potential growth in the number of UK firms looking to float in the second half of this year.

After record lows in 2023, the London Stock Exchange attracted eight new companies in the first half of 2024, raising £513.8m in total.

That included the blockbuster listing of computing firm Raspberry Pi to the LSE in June, when the Cambridge-based company raised £178.9 million.