LONDON — Dec. 21, 2025 — The London Stock Exchange is heading into the final stretch of the year with a split-screen story that’s become very “2025”: the FTSE 100 is flirting with landmark levels after a strong year, while the city’s IPO pipeline is still trying to prove it can outrun the gravitational pull of New York. A fresh wave of UK market reforms—from a stamp duty holiday for new listings to a long-promised equities “consolidated tape”—is meant to make London feel more liquid, more competitive, and less bureaucratic. [1]
At the same time, the London Stock Exchange’s owner—London Stock Exchange Group (LSEG)—is accelerating its pivot toward being a financial data-and-infrastructure heavyweight, striking AI-focused partnerships and reshaping the economics of its clearing business. [2]
What follows is a roundup of the key news, forecasts, and analyst themes shaping the London Stock Exchange story as of 21 December 2025.
FTSE 100 heads into year-end near record territory
London’s blue-chip index finished the week ended Dec. 19 higher, notching its strongest weekly gain in almost two months, with mining and defence shares doing much of the heavy lifting. Reuters reported a 2.6% weekly gain and put the FTSE 100 up about 21.1% year-to-date, ahead of the S&P 500’s 15.1% gain—an unusual bragging right for a UK benchmark often dismissed as “old economy.” [3]
Live market coverage from the same week put the FTSE 100 at 9,897 points, close to a recent record and with traders increasingly eyeing the psychological 10,000 mark as the next headline number. [4]
The sector mix tells you a lot about why 2025 worked for London equities. The market is still heavily exposed to commodities, global defensives, and financials—and those factors mattered this year. Reuters noted that precious metals and mining led gains late in the week as silver hit record highs, while aerospace and defence also rose. [5]
Bank of England easing changes the tone—but not the debate
A key macro driver into year-end was the Bank of England’s shift into rate cuts. On Dec. 18, Reuters reported the BoE cut rates to 3.75% and signalled a cautious path for further easing. [6]
Just one day earlier, UK equities rose after inflation fell to 3.2% in November (from 3.6% in October), reinforcing expectations of cuts and pushing domestic rate-sensitive sectors higher. Reuters highlighted gains in homebuilders and noted bank stocks climbing to levels not seen since 2008 in that session. [7]
But the UK’s interest-rate story remains a tug-of-war between growth worries and inflation nerves. Reuters also reported BoE Chief Economist Huw Pill warning about the risk of inflation getting “stuck” too high—an important constraint on how fast policy can ease, even if the economy looks tired. [8]
For the London market, this matters because it influences the rotation between:
- global earners (often helped when sterling is weaker and commodity prices are firm), and
- domestic cyclicals (which tend to benefit when rate cuts improve the outlook for UK housing, consumers, and smaller caps). [9]
IPOs: 2025 stayed thin, but the 2026 pipeline is getting louder
If the FTSE’s 2025 performance is the “good news,” the primary market is still the part London needs to fix.
An EY review of London Stock Exchange listings in Q3 2025 found the LSE saw three listings across the Main Market and AIM raising a combined £16.3 million in the quarter—down 75% year-on-year from Q3 2024. EY also reported 12 listings raising £199.1 million year-to-date in 2025, a 66% decline versus 2024’s £578.6 million. [10]
EY’s read: sentiment improved late in the year and the IPO pipeline for the next 6–12 months is strengthening, with timing and pricing still decisive. [11]
Reuters captured this “late-year thaw” earlier in the autumn. In October, it described a flurry of listings that raised hopes for revival after an extremely sluggish year for new share sales, citing examples including Beauty Tech Group and Fermi (which listed in London after a Nasdaq IPO), and noting Princes Group confirming plans to list shares. [12]
Meanwhile, a Bloomberg report (published Dec. 11) pointed to a stronger pipeline for 2026 than the market saw in 2025, reflecting a broader theme: bankers and advisers increasingly think the issue is less “does London have any candidates?” and more “will the valuation and liquidity math finally work?” [13]
A Financial News London analysis framed 2026 as a genuine rebound test, pointing to a set of widely discussed listing candidates for the year ahead. [14]
The counterweight: delistings and the New York pull are still real
Even with a better-sounding pipeline, the London Stock Exchange is still fighting a perception problem: companies can often get deeper liquidity and higher valuations elsewhere, especially in the U.S.
Reuters has catalogued a multi-year list of companies that have moved away from a London listing or reduced their London presence, often citing administrative burden and low trading volumes in London as part of the rationale. [15]
And the story kept moving in December. Carnival’s own shareholder presentation, published in connection with its proposed corporate simplification, explicitly described a plan that would result in Carnival plc shares being delisted from the LSE, shifting to a single NYSE-listed structure. [16]
The strategic logic—one listing, one price, lower complexity—echoes the broader challenge London has faced: even as UK equities can rally, some global businesses still see New York as the default market for liquidity and index influence. [17]
UK market reforms: stamp duty holiday, data transparency, and benchmark deregulation
In late 2025, the UK pushed multiple reforms aimed at making London more competitive as a listing venue—less friction, more transparency, and (politically) a more “pro-growth” tone.
A three-year stamp duty exemption for newly listed shares
Reuters reported that the UK government announced a three-year exemption from stamp duty on newly listed shares in London—an effort to revive what it called a struggling stock market. The tax is 0.5% and is paid by buyers when purchasing newly listed shares; critics say it discourages trading and investment. [18]
London Stock Exchange CEO Julia Hoggett welcomed the move as an “important first step,” though debate continues over whether a temporary holiday is enough versus a broader overhaul. [19]
The long-awaited “consolidated tape” for UK equities
Liquidity perception is a recurring theme in the London story, and the UK’s regulator is trying to tackle it directly. Reuters reported the FCA launched a consultation on a single feed combining real-time data from different trading platforms, expected to go live in 2027. [20]
The FCA’s own press release said the tape is intended to provide a clearer view of trading volumes and prices across venues, support listings by giving issuers and investors a fuller picture of liquidity, and strengthen the global competitiveness of UK equity markets. [21]
Benchmark rules overhaul: lighter regulation for most providers
The UK also moved to revamp regulation of financial benchmarks. Reuters reported proposals to narrow oversight so that only benchmarks posing systemic risk remain regulated, potentially shrinking the number of benchmark administrators in scope by 80% to 90%, with feedback sought by March 11, 2026. [22]
This matters in London because benchmarks are not abstract: the UK ecosystem includes major index businesses, and FTSE Russell is owned by LSEG—so benchmark policy is part of the broader “City competitiveness” agenda. [23]
AIM reforms: the LSE tries to make its growth market easier to use
London’s junior market, AIM, has been both a point of pride and a point of stress: it’s a key growth-market brand, but it has also suffered outflows and takeover vulnerability when valuations are low. [24]
In December, a Skadden memo summarised London Stock Exchange changes intended to lighten the regulatory burden and align parts of AIM more closely with the Main Market, including accommodation for dual-class share structures, changes affecting reverse takeovers, and potential increases in disclosure thresholds (from 10% to 25% under class tests) to give companies more flexibility. Many changes were described as being effective immediately via derogations, with further rule changes expected in H1 2026. [25]
This is London’s recurring balancing act in miniature: reduce friction enough to attract growth companies, while keeping the governance standards investors trust.
Private markets meet public markets: PISCES arrives
Another attempt to modernise the UK capital-markets stack is PISCES (Private Intermittent Securities and Capital Exchange System), a regulated framework for intermittent trading in private company shares.
Reuters reported that, in August, the FCA approved the London Stock Exchange as the first operator of a PISCES platform—delivered through a “sandbox” approach with the longer-term regime expected to be finalised by 2030. [26]
In Reuters Breakingviews commentary, the strategic risk was also laid out: easier private share trading could keep more companies away from public markets altogether, even if it helps the ecosystem function better. [27]
A second operator (JP Jenkins) also won approval in November, with the FCA framing competition among operators as a feature rather than a bug. [28]
LSEG’s strategy: AI partnerships, market infrastructure, and buybacks
The London Stock Exchange is a marketplace—but its owner, LSEG, increasingly behaves like a hybrid of data company + index provider + clearing house + market operator. That shift is shaping both the company’s investor narrative and the City’s broader infrastructure story.
LSEG and AI
Reuters reported that LSEG shares gained after the company struck a deal with OpenAI to integrate LSEG financial data and analytics into ChatGPT—a sign of how aggressively LSEG is positioning its data business inside AI-driven workflows. [29]
Separately, Financial News London reported that Citi and LSEG struck a data partnership that included Citi using LSEG’s Workspace platform and distributing Citi research through it—another example of LSEG pushing deeper into institutional workflows. [30]
Clearing economics and capital returns
In October, Reuters reported LSEG unveiled a deal affecting SwapClear, reducing the share of SwapClear income going to banks (to 15% in 2025 from 30%, and to 10% from 2026), alongside a share buyback after strong quarterly results and raised margin forecasts. [31]
These are not small plumbing details: post-trade economics can be a durable earnings driver, and LSEG’s willingness to renegotiate revenue sharing speaks to how intensely it is managing the profitability of its infrastructure assets. [32]
2026 forecasts and analyst themes: 10,000 is a number, not a law of nature
A lot of the market talk going into 2026 is anchored on one psychologically irresistible idea: FTSE 100 at 10,000.
An IG analysis published in early December argued the 2026 case for the FTSE 100 rests on “twin pillars”: resilient earnings and a more supportive Bank of England, while warning volatility could return. It highlighted a valuation gap—describing the FTSE 100 as trading on a P/E around 14 versus the S&P 500 at about 25—and suggested the 10,000 level could be reached in Q1 2026 (in that strategist’s view). [33]
That forecast rhymes with the market’s late-December reality: the index is close enough that 10,000 becomes a narrative magnet. But investors are also watching three risk clusters that could turn a neat round-number story into a messy one:
- Inflation persistence vs. growth weakness — if inflation stays sticky, the BoE may cut more slowly than markets hope, even as growth looks fragile. [34]
- Liquidity and listings credibility — reforms can help at the margin, but London still needs big, successful 2026 flotations to change global behaviour. [35]
- The private-market alternative — PISCES might modernise capital formation, but it could also make it easier for companies to delay IPOs, keeping public-market supply constrained. [36]
Bottom line: London’s market is stronger than its reputation—and 2026 is the proof year
As of Dec. 21, 2025, the London Stock Exchange story is no longer “London is broken” or “London is back.” It’s more specific—and more useful than slogans:
- The public market benchmark (FTSE 100) has delivered a standout year and is heading into 2026 with momentum. [37]
- The primary market (IPOs) is still under pressure, but the pipeline is visibly more active—and it will be tested by whether big candidates choose London and then trade well. [38]
- The policy machine is working hard to reduce friction (stamp duty relief), improve transparency (consolidated tape), and modernise the ecosystem (PISCES, AIM reforms, benchmark rule changes). [39]
- And LSEG is increasingly selling the idea that London’s exchange isn’t just a trading floor—it’s a data-and-infrastructure platform, now leaning into AI distribution. [40]
That combination sets up 2026 as a defining year: not for whether London can rally, but for whether it can translate that rally into listings, liquidity, and long-term relevance.
References
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