After a wave of delistings, can London’s stock market reverse the decline?

London's stock market has faced challenges in recent years, with a significant decrease in the number of companies listed on the London Stock Exchange (LSE) from 2,429 in 2015 to 1,534 in May 2026, reaching a decade low. This decline has been attributed to a smaller domestic investor base and shallower capital pools compared to the U.S. Additionally, years of underperformance have led to depressed valuations, making London-listed companies more attractive to foreign buyers and private equity firms.

Octopus Energy founder Greg Jackson has criticized the LSE, suggesting it needs more "hustle" to attract IPOs back. However, Julia Hoggett, the CEO of LSE, disputes these claims, emphasizing that the exchange has been driving a reform agenda to reverse the decline in flotations and boost capital market growth. Hoggett's reforms include scrapping shareholder votes for most acquisitions, reducing regulatory burdens on AIM (the junior market), and creating Pisces, a new secondary market for trading existing shares.

The U.K. has also rewritten its listing rules, allowing companies to avoid shareholder votes for most acquisitions and granting founders more control after listing. Hoggett reports a rise in acquisitions since these changes, and smaller companies are already benefiting from AIM's revised rules. The total U.K. M&A value more than doubled to £124.2 billion in the first half of 2026, though the number of deals fell slightly.

Hoggett cites the growing list of companies planning to list in London as a clear sign of recovery, noting that the exchange now has the largest IPO pipeline since 2005. She attributes the growing optimism to the fact that Britain produces more billion-dollar startups than any country besides the U.S. and China, and topped the inaugural Hurun Country 100 ranking in 2026. The U.K. IPO proceeds also more than tripled in the first half of 2026 compared to the same period last year.

However, Hoggett acknowledges that London's dominance as a gateway for international companies is waning, with the number of London IPOs declining in 2025. While this is partly due to a broader global trend, she believes it's also a result of the U.K. being one of the last major markets to shift to a more IPO-friendly environment. Hoggett urges against creating false binaries, particularly since many U.K. companies that moved to the U.S. have underperformed or failed.

Despite these challenges, Hoggett remains confident in London's potential, arguing that modernizing the exchange's infrastructure can help the market retain its competitiveness in the next decade. She believes that capital markets are a vital driver of growth, jobs, and national prosperity and advocates for greater public investment in the stock market, emphasizing the need to incentivize U.K. investors to invest in the country.