There are growing concerns about Britain’s lagging economic performance since the global financial crisis in 2008.
Growth has slowed and productivity, which is vital to raising living standards, has been particularly weak relative to equivalent nations.
Hourly labour productivity in the UK is 24% below where it would be had it maintained its pre-financial crisis trend, according to an analysis by Bloomberg economists.
After a tumultuous year in which it lost the top spot among Europe’s stock markets, London is now grappling with a slate of companies ditching local listings in favour of the US.
And for the beleaguered London Stock Exchange, which has struggled to regain its footing after Brexit set off an outflow of major companies, the bad situation took a turn for the worse last week.
On December 5, an outage interrupted trading on about 2,000 stocks. The next day, tourism firm TUI AG said it was considering delisting in favour of Frankfurt. On Friday, Flutter Entertainment announced a date for its New York listing, and commodities clearer Marex Group confirmed it was also heading to the US.
The outage was the third for the exchange’s parent company in as many months, while the company announcements add to the UK’s disappointment over the summer when major British tech firm Arm Holdings chose a listing in New York rather than return to London.
Just 10 small firms have listed shares in London this year, raising about $990mn combined, on track for the lowest volume in more than a decade, according to data compiled by Bloomberg. The total was also historically low last year, with just over $1bn raised.
True, sluggish IPO volumes are a problem for exchanges everywhere, with this year set to be the worst since 2011. But the LSE is suffering from delistings at the same time and the performance of companies that have chosen to IPO on the exchange isn’t helping to boost sentiment. Deliveroo and Dr Martens have lost at least 60% in value since they listed in 2021.
The Marex news is a particular blow because it pulled plans to list in London two years ago.
Building materials group CRH and plumbing equipment supplier Ferguson have also chosen New York as their primary venue in recent years.
Other companies such as InterContinental Hotels Group and British American Tobacco have faced pressure from shareholders to move their listings to the US.
And the outages give weight to criticisms that London’s market is in decline.
Indeed, the London market is facing threats from multiple directions.
UK-listed companies are increasingly targeted by US buyout funds and other investors seeking to take advantage of a weaker pound and depressed valuations.
As companies decide to stay private for longer and IPOs remain far and few between, the loss of established listed companies is an added blow.
In 2021, Shell’s executives explored moving the company’s stock market listing and headquarters to the US from the UK, the Financial Times reported in March, a move that would have sent shock-waves through corporate Britain.
Since former prime minister Margaret Thatcher unleashed a wave of privatisations in the 1980s, the LSE has been a symbol of Britain’s free-market economy.
However, trading volume has slumped in recent years and some British companies have picked other markets to list their shares.
Coming at a time of stalling economic growth, it could mean more money leaving domestic equity funds after record outflows of $26.3bn last year.
The wider problems appear to fit the narrative of a nation whose economy has run into trouble, hit by under-investment and the jolt to trade from Brexit.