Deal market set for another ‘subtle spike’ ahead of Autumn Budget
The UK deal market is set for a further boost as caution among business owners settles and they rush to get ahead of any potential tax changes in the Autumn Budget, says leading audit, tax and consulting firm RSM UK.
Today’s ONS quarterly M&A statistics show the total combined number of cross-border and domestic M&A transactions involving a change in majority share ownership rose to 501 in in Q2 2025, from 412 the previous quarter. The value of domestic M&A (UK companies acquiring other UK companies) was £3.4bn in Q2 2025, £0.6bn more than the previous quarter, and up on Q2 2024 (£2.8bn).
The value of inward M&A (foreign companies acquiring UK companies) reached £9.3bn in Q2 2025, a £11.8bn decrease on the previous quarter, but £4.7bn more than Q2 2024. The total value of outward M&A (UK companies acquiring foreign companies) in Q2 2025 was £4.0bn, £4.0bn lower than Q1 2025, and £0.5bn less than Q2 2024.
James Wild, partner and head of M&A at RSM UK, said: “The UK deals market showed signs of improvement in Q2, with deal activity starting to pick up as nervousness among business owners settles. Businesses are learning to navigate the economic uncertainty and are no longer holding up deal processes because of it. We expect to see another subtle spike in deal activity in the coming months as we approach the Autumn Budget, with business owners pressing ahead to get deals done to avoid incurring higher taxes. However, for those that won’t complete in time, it’s likely they’ll press pause to wait for the outcome of the budget.
“The current economic backdrop of slow growth, high inflation and weak global demand means we’re unlikely to see a surge in appetite from buyers. That said, appetite is building in the private equity market, particularly as PE funds haven’t made enough investments this year, so are having to play catch up and take greater risk. Many are under increasing pressure to deploy capital but also exit companies and generate returns for investors.
“Any changes to inheritance tax or capital gains tax will be damaging to the deals market. Business owners want certainty that they won’t be hit with higher taxes, both at the point of sale and during the day-to-day running of the business which could in turn dent profits. Further reductions in interest rates will also help to stimulate activity, although the prospect of another rate cut this year is looking slim.”