While 2025 saw a strong start to high deal volumes due to an unexpectedly buoyant UK economy, the second half of the year slowed considerably. The outlook is not much better for 2026, with predictions of subdued growth.

The growth forecast by the British Chamber of Commerce following the 2025 Budget predicted a 1.2% decline – so not quite the economic boost that was promised.

Healthy deal flowincoming

Despite this, David Petrie, Head of Corporate Finance at ICAEW believes the sector is likely to see some significant deal flow coming through.

“I think 2026 is going to be a busy year and probably busier than 2025 for private company M&A and private equity investment,” says Petrie.

“There was a certain amount of public company activity last Autumn and we’re seeing continuing investment from private equity houses seeking to deploy the large supply of capital they’ve been sitting on, in some cases for years. The macroeconomic backdrop could certainly be better, but things look encouraging.”

PE investment in accountancy firms may end

According to Petrie, private equity (PE) has been investing extensively in accountancy firms in recent years (particularly since 2021 when TowerBrook Capital Partners announced it was investing in global tax and accounting firm EisnerAmper).

Accountancy and audit firms are seen as low risk and have stable, recurring revenue. So, although the PE investment trend is likely to continue through 2026, Petrie warns the “window will close” at some point, with private equity looking for an exit.

He says: “We’re at a particular point in the market at the moment and it will be very interesting to see how it evolves over the next 12 to 18 months.”

Strengthening London’s IPO market

One area of significant focus for 2026 and beyond is around increasing the number of IPOs on the London Stock Exchange.

Historically, the City of London was always seen as the world’s leading financial hub, but in recent years, its dominance has weakened, due in part to Brexit and poor investor appetite.

As Petrie explains, there’s a strong desire to try and address some of the difficulties in the market and increase the flow of new businesses onto the London Stock Exchange.

“Certainly, potential new public companies are going to be at the forefront of policymakers and regulators minds going forward,” he says.

AI could overhaul the market

So what changes are ICAEW members in advisory likely to face next year? Unsurprisingly, artificial intelligence (AI) is number one.

In Petrie’s view, accountants and investors are already quite radically changing the way they operate. For example, large language models, both off-the-shelf and proprietary are significant speeding up and changing the nature of report writing in so many aspects of the deals market.

This creates opportunities but also requires different review skills from experienced people to ensure accuracy and manage risk. 

Regulatory change will impact the sector

There will also be considerable regulatory change, which financial professionals will need to get to grips with. For example, Public Offers and Admissions to Trading Regulations 2024 (POATRs) which replaces the old EU Prospectus Regulation is a new framework for trading on public markets such as the London Stock Exchange, comes into effect in January 2026.

Also, Basel 3.1, a global regulatory framework for banks to enhance resilience of the global finance system, comes into force in 2026.

So overall, while economic growth may remain muted for 2026, Petrie expects to see continued PE investment and good deal flow, as well as a raft of regulatory reforms. As always, the world of deals and corporate finance is far from standing still.