City grandees have called on the government to revive “animal spirits” in London’s capital markets and accelerate regulatory reform on the anniversary of the Big Bang.

Industry leaders told the City has enjoyed decades of success since the sweeping deregulation of the Square Mile in 1986 but Britain’s financial services industry is now facing existential threats in the form of a downturn in public equity investment and a flight of firms away from the London Stock Exchange.

“No international financial center has a God-given right to success, and complacency is the single most dangerous thing that any international financial centre can indulge,” Miles Celic, chief executive of TheCityUK, told City AM.

He added the Big Bang does not need to be “followed by a Big Bang 2.0 and then in another 40 years a Big Bang 3.0” and reform of the UK’s capital market should instead be viewed as “a journey”.

Spearheaded by Margaret Thatcher’s government on October 27 1986, the Big Bang dismantled fixed commissions, ended the divide between brokers and jobbers, and opened London’s trading floors to foreign banks and screen-based electronic dealing.

Since taking power in 2024, Labour has promised to reinvigorate the City through scrapping burdensome regulation. Former Chancellor Rachel Reeves handed watchdogs a secondary growth objective that required them to consider the international competitiveness of the UK alongside their core roles of stability. 

“Regulators have done a lot to improve the environment and improve the opportunity for companies to list in the UK,” Steven Fine, chief executive of Peel Hunt, said. 

“What we need now is a big bang on the capital side to reignite the City’s animal spirits. We need to incentivise domestic investors to back UK listed stocks and to stop rewarding them for investing overseas.”

Stacey Parsons, managing director at Retail Book, said: “The piece of the puzzle that’s now needed is confidence and stability. Less policy and more practice. We need to start treating UK capital markets as national infrastructure.” 

The London Stock Exchange has faced a testing few years with a drought of new IPOs and a flurry of delistings and foreign takeovers. Since the start of 2023 there have been 166 bids for firms with a price tag over £100m with the collective value topping £180bn. This is compared to just 11 IPOs above £100m for a total value of £6bn.

“Forty years on from the Big Bang, the London Stock Exchange continues to evolve, but our purpose remains the same: supporting ambitious companies and the investors who back them,” Julia Hoggett, chief executive of the London Stock Exchange, said.

“That continuous innovation is vital to ensuring that our markets are able to unlock the capital that delivers what matters – investment in businesses, jobs and growth across the country.”

In the 2025 Budget, Reeves launched a stamp duty holiday, removing the 0.5 per cent levy on UK stocks for newly-listed companies in their first three years of trading. But industry has continued to urge the government to go further and boost tax incentives to invest. 

Their warnings come ahead of a John Healey’s maiden Budget on Wednesday in which he is expected to hit the UK’s banking sector with higher taxes. He has reportedly ruled out hiking capital gains tax over fears it would hammer investment into the UK.

“[The Big Bang] made the UK internationally competitive and unleashed our country’s animal spirits in the decades that followed,” shadow Chancellor Andrew Griffith told . “In the week of the Budget, Chancellor Healey must remember that when the City wins, so does Britain,” he added.