Autumn Budget: Business leaders and investors can still unlock opportunities

Following the Autumn Budget, forecasts provided by the Office for Budget Responsibility suggest that UK GDP growth will remain muted (c. 1.5% YOY) between now and 2030, as a result of subdued consumer and business confidence, as well as the UK’s longstanding productivity issues.

That said, there are reasons for business leaders, entrepreneurs and private equity professionals to be cautiously optimistic. In the first instance, the financial markets’ reaction to the Budget has been relatively benign, with no significant adverse movements in gilt yields or sterling, which can impact interest rates and cashflows. 

But just as importantly, the 2025 Budget provides us with some certainty about the shape of the fiscal landscape. This clarity should allow decision-makers to plan for the medium term. 

In both private and public markets, we know that deals have been delayed as participants waited for more stable political and fiscal conditions to emerge. Now that the policy agenda is set – at the time of writing, at least – we expect to see some of this congestion start to unwind.

From an operational perspective, the government’s taxation plans will increase cost pressures on businesses. The higher National Minimum Wage, limits on salary-sacrifice schemes and fiscal drag from frozen income-tax bands will create significant headwinds, forcing businesses to re-evaluate remuneration structures, and broader expansion plans.

However, business leaders and private equity professionals typically have a resilient growth mindset. Many will continue to pursue initial public offering (IPO) or merger and acquisition (M&A) activity. In that regard, the Chancellor’s announcement of a three-year stamp-duty holiday for new UK IPOs is welcome. While unlikely to be the decisive factor when choosing to list in London over New York or Frankfurt, it could provide an additional incentive.

So far in 2025, we have seen two major UK IPOs, with at least two more at an advanced stage. The domestic flotation pipeline therefore appears healthier than it has been for several years, and recent research from EY suggests sentiment in this part of the market continues to improve¹.

In contrast, M&A activity has been more subdued in 2025. Despite a handful of large, high-profile deals, PwC data indicates a 12% fall in deal value, and an almost 20% decline in volumes in the first six months of the year², partly due to disruption from US tariff policy. That said, we think UK businesses will remain attractive prospects because they are likely to have lower valuations than international peers, but still generate revenue in overseas markets.  

It is less clear how impactful the Government’s attempts to encourage individuals to allocate funds to UK stocks will be. Rachel Reeves plans to cut the amount of money that can be deposited in a tax-free cash ISA every year, and the government is working with major retail investment platforms to promote buying of UK-listed stocks. Whether this will translate into a significant increase in support for British companies remains to be seen.

Finally, in terms of exits, assets are often held longer in stagnant markets where valuations are depressed – a dynamic many shareholders have experienced since the pandemic. If funds and investors are unable to exit at current valuations, we are likely to see increased interest in creative financing options, such as minority stake sales or continuation vehicles.

Investec is positioned to help individual and corporate clients prepare for events across the business lifecycle. Whether strengthening balance sheets, borrowing, or planning exits, we will work with owners, boards and investors to ensure they are ready to take advantage of opportunities when they arise.

¹ https://www.ey.com/en_uk/newsroom/2025/10/muted-uk-ipo-activity-in-q3-but-confidence-builds
² https://www.pwc.co.uk/press-room/press-releases/research-commentary/2024/uk-m-a-activity-contracts-in-h1-2025--but-strategic-investment-d.html

Important information:

This article is for general information purposes only and should not be used or relied upon as professional advice. It is advisable to contact a professional adviser if you need financial advice. The opinions featured are not to be considered the opinions of Investec.