The decline of stock markets in the UK: is regulation to blame and deregulation a fix?

A gloomy narrative has recently surrounded the London Stock Exchange (‘LSE') and London's standing as an international financial centre, driven by declining IPOs, fewer listed companies, and high-profile delistings, with firms preferring the US market. This has triggered a major UK regulatory overhaul, spanning listing rules, audit, corporate governance, and capital raising, as regulation was widely blamed for this status quo. This article examines UK market developments and the motivations behind the overhaul, finding little evidence of a funding gap for firms. Instead, reforms appear aimed at preserving London's global financial stature. It argues that regulation has become a convenient scapegoat but was neither the root cause of the LSE's challenges nor will deregulation resolve them. Two analyses support this view: a UK–US regulatory comparison, which weakens claims of UK overregulation, and an assessment of the market ecosystem, which suggests structural issues beyond regulation are hindering the LSE’s competitiveness.