Keep the flame alive and reinvigorate our public equity markets

And they say the City has lost its entrepreneurial zeal.

One look at Leadenhall Market last night – and the flower stall hawking £80 roses – suggests that the rules of supply and demand are very much the guiding force of the Square Mile, and last-minute lotharios aside that’s all to the good.

If the animal spirits of capitalism can’t be unleashed here, where else can they be? One could argue that those spirits are unduly constrained. That’s certainly the newest grumble amongst City grandees over lunch – the capital has lost its appetite for risk, they say.

That intangible lies behind everything from the slump in our capital markets to our inability to keep scaling businesses headquartered on these shores.

There is probably some truth in that, but it’s not telling the whole story: in particular, regulation plays a huge part too in bending the market away from risk and toward the safety of fixed-income assets.
What can change all this? It is not as if the solutions have not been discussed.

We have seen well-researched reports from City bigwigs like Mark Austin and Rachel Kent with oven-ready recommendations; the FCA has proposed a raft of listing reforms.

Yet how many of these have made it to reality?

The answer is precious few, and with an election coming up and momentum lost amid the political tumult, it’s hard to keep the flame of optimism alive.

Reinvigorating our public equity markets matters: not just for those who’ve got a few quid in there thanks to auto-enrolment.

Scale-ups are telling us that it’s now even harder than it was to raise serious capital in London unless they promise to go stateside: our IPO market, such as it is, isn’t giving investors the confidence they’ll be able to exit at a decent multiple.

The biggest risk in London is stasis, and that’s the worst of all worlds.