Leading Indicators - From reform to resilience: UK equities surge ahead of Reeve's Mansion House agenda

 Reeves set to target city revival as London IPOs sink

Chancellor Rachel Reeves will deliver her Mansion House speech today, where she is expected to unveil major reforms to UK financial regulation. Aimed at boosting growth and competitiveness, the changes include raising the FCA’s secondary share issuance threshold from 20% to 75%, a move expected to save firms £40 million a year. The reforms could also support UK CRE by making it easier for listed firms to raise equity, potentially unlocking capital for development and investment.

UK, Europe and Japan equities outpace US YTD

UK equities have performed well this year, with the FTSE 100 rising above the 9,000 mark and gaining +18% YTD, while the FTSE 350 is up +17%. Both indices have outperformed most major global peers, including the S&P 500 (up just +6%). The FTSE’s strength has been particularly notable since the April correction, supported by exposure to energy, materials, and defensive sectors. Investor rotation into non-US assets, partly due to concerns over Trump’s unpredictable policy stance, has also boosted demand for UK stocks .

Market volatility drops despite fresh tariff announcements

Market volatility has dropped to its lowest levels this year, with the VIX falling to 17.9, below its long-run average of 20. This comes despite President Trump’s latest tariff threats, including a 50% duty on copper, levies on pharmaceuticals, and new tariffs on imports from Japan, South Korea, and the EU. Markets remain calm, as investors anticipate that any measures posing a risk to US growth will ultimately be scaled back .