Why The London Stock Market Is Shrinking in 2025 (And What It Means for You)

Money Talks, Literally – With Uncle Abundance

“Uncle, what’s happening to the UK stock market?”

Now that’s a sharp question, and one I’ve been hearing more often recently.

See, the London stock market isn’t just going through a rough patch. It’s shrinking. Big names are leaving, new listings are drying up, and the Financial Times Index (FTSE) doesn’t carry the weight it once did.

Let’s talk about why this is happening — and what it means for you as an investor.

A Quick Timeline: How We Got Here

This didn’t happen overnight. The London stock market decline has been years in the making:

• 2015: London was still considered one of the world’s leading financial hubs, rivalled only by New York and Hong Kong.
• 2018–2020: Brexit uncertainty caused hesitation among investors and companies alike.
• 2021–2022: Tech companies, especially startups, started favouring U.S. listings, where the valuations were better and red tape was lighter.
• 2023: Chip designer ARM chose to list on the NASDAQ instead of returning to the London Stock Exchange — a symbolic blow.
• 2024–2025: Big players like CRH, Flutter Entertainment, and Smurfit Kappa all announced or completed moves to U.S. exchanges.

This shift isn’t just a coincidence; it’s a signal.

Why Are Companies Leaving the FTSE 100?

Let me break this down for you:

1. Valuation Gaps

Companies listed in the U.S. tend to get higher valuations. That means they can raise more money for less equity. If you’re a CEO trying to scale, why would you stay in London?

2. Heavy Regulation

The UK market is often seen as overly cautious. Companies, especially fast-growth ones, are put off by the extra scrutiny and compliance hoops.

3. Lack of Investor Appetite

Many UK funds are conservative and prefer dividends over innovation. That makes it harder for riskier or tech-focused firms to thrive in London.

4. The U.S. Growth Magnet

Investors want in on the big action, and right now, that action is in America. Better access to capital, more liquidity, and stronger analyst coverage all pull companies toward U.S. markets.

Why It Matters to Everyday Investors

This isn’t just a City of London problem.

If you’ve got a pension, an ISA, or use UK-based investing platforms, the shrinking of the London stock market affects:

• Your portfolio diversification
• Access to new high-growth IPOs
• UK economic strength and job creation

Fewer listings in London mean fewer homegrown success stories to back. That’s not just disappointing, it’s limiting.

Meet PISCES: A New Chapter in UK Capital Markets

While the FTSE 100 and London stock market may be losing some steam, innovation isn’t dead; it’s just evolving. One of the freshest additions to the UK financial scene is PISCES: the Private Intermittent Securities and Capital Exchange System.

Now, PISCES isn’t here to replace the traditional stock market; it’s carving its own lane.

Here’s what makes it interesting:

• It’s Built for Private Companies
  PISCES allows private firms to raise capital and offer shares to investors in a controlled, intermittent way, without jumping through the full IPO hoops.
• Trading Windows, Not Daily Volatility
  Shares are traded in defined periods rather than constantly, like on the LSE. This gives founders more breathing room and avoids the pressure of daily price swings.
• It Encourages Innovation and Growth
  PISCES is designed to attract high-growth UK startups and scale-ups who need capital, but aren’t ready (or willing) to list on a public exchange yet.
• Backed by the FCA
  It’s part of the UK’s push to keep its capital markets competitive post-Brexit, offering a more flexible route to funding for British businesses.

So, while it won’t be replacing the FTSE anytime soon, it’s a smart move toward modernising UK finance, especially if it helps founders stay local rather than jumping ship to the U.S., especially for younger investors looking for relevance, values, and digital-first solutions.

A Wake-Up Call for the UK

The shift we’re seeing isn’t just a trend….it’s a wake-up call. If the UK wants to stay competitive, it’ll need to modernise its markets, support innovation, and stop punishing growth with red tape. Investors are adapting. Now it’s time for policymakers to catch up.

Final Thought from Uncle Abundance

“Markets grow when there’s trust, energy, and room to move. If your country’s market feels more like a museum than a marketplace, don’t be surprised when people leave.”

Stay smart. Stay flexible. And look beyond borders when you build your wealth.

Until next time,
Uncle Abundance
P.S. Always here with the kettle on and a financial truth bomb or two.