Key Points from the Week:
UK markets remained focused on monetary policy communication and political transition this week, with renewed geopolitical jitters adding further pressure. Gulf strikes put the FTSE on edge as the fragility of the recent peace deal became apparent, while UK equities also slid as SpaceX led a broader global tech rout. On the policy front, Bank of England officials Huw Pill and Megan Greene questioned whether the Bank’s new scenario-based communication framework risks diluting policy consensus and making future rate expectations harder for markets to interpret, a notable tension around how the Bank explains itself, not just what it decides. Elsewhere, easing inflation expectations, Alan Taylor’s support for an extended policy pause and Jonathan Haskel’s nomination to chair the Office for Budget Responsibility reinforced expectations that policy will remain centred on stability and fiscal credibility. Sterling posted solid gains against the euro as investors looked beyond the expected transition to Andy Burnham as Prime Minister, with the UK’s biggest union now backing Ed Miliband for chancellor adding a fresh dimension to the succession debate. The widening £59.2bn tax gap, the Treasury’s confirmation of a 22% charge on cash interest within stocks and shares ISAs, and continued scrutiny of public finances all point to a fiscal environment under real strain.
Financial services activity remained robust, driven by continued consolidation, capital raising and product innovation, even as governance issues surfaced. The FCA unveiled plans to prevent activists from seizing control of trusts, while the collapse of WealthTek DFM triggered a £31.7m payout from its custodian bank, a reminder of the operational and oversight risks that persist alongside the sector’s growth. On the deal front, XPS Group expanded into general insurance consulting through its acquisition of APR Actuarial Solutions, Mattioli Woods strengthened its regional wealth platform with the acquisition of KRD Financial Advisers, taking group assets to approximately £32bn, and Openwork and Söderberg have emerged as the two remaining bidders in the race for Benchmark Capital. Equipal secured £16.25m of growth funding to scale SME asset finance, Marshmallow partnered with Percayso and TransUnion to enhance data-driven underwriting and Exante launched a €1m grant programme supporting open-source fintech innovation.
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Welcome to HSA Advisory’s Financial Services Newsletter, your concise roundup of UK macroeconomic developments and financial services transactions.
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UK Macroeconomics
30 June 2026: FTSE remains under pressure as Gulf strikes threaten fragile peace deal
– UK equity markets remained on edge after renewed military strikes in the Gulf cast doubt over the durability of the recent US-Iran peace agreement, prompting investors to reassess geopolitical risks and their potential impact on global financial markets
– Concerns that the peace process could unravel renewed fears of disruption to energy supplies through the Strait of Hormuz, increasing the risk of higher oil prices, stronger inflationary pressures and slower global economic growth
– The heightened uncertainty weighed particularly on risk-sensitive sectors, with investors adopting a more cautious stance ahead of further developments in the Middle East while monitoring the implications for corporate earnings and monetary policy
– Analysts say the renewed tensions highlight the fragility of recent improvements in market sentiment, with UK equities likely to remain highly sensitive to geopolitical developments, oil price movements and expectations for future Bank of England policy
29 June 2026: BoE Chief Economist Huw Pill questions shift to scenario-based policy communication
– BoE Chief Economist Huw Pill said the Bank of England’s move away from publishing a single central economic forecast towards multiple scenarios has made it more difficult for members of the Monetary Policy Committee (MPC) to develop a shared view of the economic outlook and interest rate policy
– Pill echoed concerns previously raised by BoE policymaker Megan Greene, warning that greater emphasis on individual policymakers’ assessments and vote explanations could reduce incentives to build consensus, potentially making the Bank’s policy messaging less unified
– The Bank introduced the new communication framework in April, replacing a single central projection with three alternative economic scenarios and publishing individual MPC members’ explanations of their voting decisions to improve transparency around policy uncertainty
– Analysts say the debate highlights the trade-off between greater transparency and clear policy guidance, with a more fragmented communication approach potentially making it harder for financial markets to interpret the Bank of England’s reaction function and future interest rate path
27 June 2026: FCA proposes measures to protect investment trusts from activist takeovers
– The Financial Conduct Authority (FCA) has proposed new rules aimed at preventing activist investors from gaining disproportionate control of UK investment trusts, seeking to strengthen governance and protect the interests of long-term shareholders
– The proposals would make it more difficult for minority activist shareholders to influence or seize control through existing voting mechanisms, following growing concerns that current rules can be exploited to pursue short-term objectives at the expense of broader investor interests
– The FCA said the reforms are intended to improve market confidence in the investment trust sector by ensuring governance arrangements remain fair, transparent and aligned with the long-term purpose of listed investment vehicles
– Analysts say the proposals could reduce governance uncertainty for investment trusts while balancing shareholder rights with board stability, although they are likely to prompt debate over the appropriate role of activist investors in driving accountability and corporate performance
26 June 2026: UK inflation expectations continue to moderate, easing pressure on the BoE
– A Citi/YouGov survey showed that UK households’ expectations for future inflation continued to decline in June, suggesting consumers are becoming more confident that price pressures will gradually ease despite recent geopolitical and energy-related shocks
– The findings are likely to reassure the Bank of England, as lower inflation expectations reduce the risk of higher wage demands and persistent price-setting behaviour that could cause temporary inflation shocks to become embedded in the wider economy
– The survey complements recent data showing stable headline inflation and a gradual easing in private-sector wage growth, reinforcing signs that underlying domestic inflationary pressures are beginning to moderate
– Analysts say the continued decline in inflation expectations strengthens the case for the Bank of England to maintain its current policy stance, with policymakers likely to focus on monitoring incoming economic data rather than responding to temporary fluctuations in inflation driven by external factors
26 June 2026: UK’s largest union chief backs Ed Miliband for Chancellor
– The leader of the UK’s largest trade union publicly endorsed Energy Secretary Ed Miliband to become the next Chancellor, adding a significant political voice to the debate over the economic direction of the incoming government following Prime Minister Keir Starmer’s resignation
– The endorsement reflects growing support within sections of the Labour movement for a Chancellor who would prioritise green investment, industrial strategy and public infrastructure spending alongside measures to strengthen workers’ rights and long-term economic growth
– The intervention comes as markets closely scrutinise potential Cabinet appointments under Greater Manchester Mayor Andy Burnham, with investors seeking reassurance that any new economic team will maintain fiscal discipline while pursuing growth-oriented policies
– Analysts say the endorsement highlights the competing priorities facing the next government, with the choice of Chancellor expected to shape expectations around public spending, taxation, industrial policy and the credibility of the UK’s fiscal framework
26 June 2026: FTSE ends week lower as banks and energy stocks outweigh property gains
– UK equity markets closed lower at the end of the week, with the FTSE 100 and FTSE 250 pressured by declines in heavyweight banking and energy stocks, reversing part of the gains recorded earlier in the week
– Energy companies weakened as softer oil prices weighed on the sector, while major banks came under pressure amid cautious investor sentiment and renewed concerns over the global economic outlook and interest rate expectations
– The decline contrasted with stronger performance earlier in the week, when real estate stocks rallied after Segro rejected a $16.6bn takeover proposal from Prologis, helping the FTSE 250 snap a four-day losing streak and lifting broader market confidence
– Analysts say the market’s direction continues to be driven by sector rotation and global risk sentiment, with uncertainty surrounding AI-related technology stocks, commodity prices and monetary policy offsetting optimism generated by takeover activity and improving domestic political clarity
26 June 2026: WealthTek collapse results in £31.7m compensation payout from custodian bank
– The collapse of WealthTek has triggered a £31.7m compensation payout by its custodian bank, marking one of the most significant recoveries linked to the failure of a UK wealth management firm and providing financial relief to affected clients
– The payout reflects the custodian’s responsibility for safeguarding client assets, highlighting the critical role of custody arrangements in protecting investors when regulated firms experience operational failures or enter insolvency
– The case has intensified scrutiny of governance, oversight and operational controls within the wealth management sector, with regulators expected to examine whether existing safeguards are sufficient to protect client assets and maintain confidence in the industry
– Analysts say the outcome reinforces the importance of robust custody and asset protection frameworks, while prompting wealth managers, custodians and regulators to reassess operational risk management, due diligence and client asset protection standards across the sector
26 June 2026: Sterling posts strong weekly gain against euro despite political upheaval
– Sterling strengthened modestly and was on course for its best weekly performance against the euro since mid-May, with investors largely looking past Prime Minister Keir Starmer’s resignation and focusing instead on broader global currency trends and relative monetary policy expectations
– The improvement followed a challenging period in which the pound was heading for its worst monthly performance against the US dollar since July, reflecting broad dollar strength rather than a deterioration in UK-specific fundamentals
– Markets appeared increasingly confident that the transition to Greater Manchester Mayor Andy Burnham’s expected leadership would be orderly, reducing concerns that political uncertainty would materially disrupt the UK’s fiscal or economic policy framework
– Analysts say sterling’s contrasting performance against the euro and dollar highlights the importance of relative central bank expectations and global currency dynamics, with the pound remaining sensitive to Bank of England policy signals, political developments and broader shifts in investor risk appetite
25 June 2026: Treasury confirms 22% tax charge on cash interest within Stocks & Shares ISAs
– The UK Treasury has confirmed that interest earned on uninvested cash held within Stocks & Shares ISAs will be subject to a 22% tax charge, providing long-awaited clarity on the tax treatment of cash balances held by ISA providers
– The measure is intended to ensure a consistent tax framework across investment platforms and reduce incentives for large cash holdings within Stocks & Shares ISAs, reinforcing their primary purpose as long-term investment vehicles rather than cash savings accounts
– ISA providers are expected to review their cash management processes, pricing structures and operational arrangements to comply with the revised rules, while investors may be encouraged to deploy idle cash into investment assets more promptly
– Analysts say the confirmation could influence platform economics and investor behaviour, increasing the focus on efficient cash management within Stocks & Shares ISAs while maintaining the UK’s broader objective of promoting long-term retail investment and capital market participation
24 June 2026: UK equities decline as global technology sell-off weighs on markets
– UK equity markets moved lower as a broad global technology sell-off, led by weakness in SpaceX-related stocks and the wider technology sector, dampened investor sentiment and triggered a rotation away from growth-oriented equities
– The decline reflected broader concerns over technology valuations and global risk appetite, with the negative sentiment spreading beyond the tech sector to weigh on UK-listed companies exposed to international growth trends
– The weakness offset earlier optimism generated by takeover activity and improving domestic political clarity, as investors shifted their focus back to global market risks, interest rate expectations and corporate earnings prospects
– Analysts say the session highlighted the increasing influence of global technology trends on UK equity performance, with international market developments continuing to shape investor sentiment alongside domestic economic conditions and Bank of England policy expectations
24 June 2026: FCA considers £1m settlement proposal in commodity trader investigation
– The Financial Conduct Authority (FCA) is considering a £1m (£1.32m) contribution to a crisis fund offered by 11 commodity day traders as part of efforts to resolve a three-year investigation into alleged breaches of UK competition law
– The proposed settlement would allow the traders to contribute to a public-interest fund without formally admitting wrongdoing, representing an alternative enforcement approach as the regulator seeks to conclude a complex and long-running case
– The investigation centres on suspected anti-competitive conduct in commodity trading markets, highlighting the FCA’s continued focus on preserving market integrity, promoting fair competition and deterring behaviour that could undermine confidence in UK financial markets
– Analysts say the outcome could set an important precedent for how the FCA resolves future competition and market conduct investigations, balancing effective enforcement with proportionate settlements while reinforcing expectations around transparency and compliance within wholesale financial markets
23 June 2026: UK nominates former BoE policymaker Jonathan Haskel to lead fiscal watchdog
– The UK government nominated former BoE policymaker Jonathan Haskel as its preferred candidate to become Chair of the Office for Budget Responsibility (OBR), filling a key leadership position at the independent body responsible for assessing the UK’s economic and fiscal outlook
– Haskel brings extensive experience in monetary policy and economic research, having previously served on the Bank of England’s Monetary Policy Committee (MPC), where he was closely involved in interest rate decisions and analysis of productivity, inflation and long-term growth
– The appointment comes after the OBR leadership role remained vacant for six months following last year’s Budget-related information leak, with the government seeking to reinforce the institution’s credibility and independence at a time of heightened fiscal scrutiny
– Analysts say Haskel’s nomination is likely to be welcomed by financial markets given his strong academic and policymaking credentials, with the OBR expected to play an increasingly important role in evaluating government borrowing, fiscal rules and the sustainability of public finances under the incoming administration
23 June 2026: BoE policymaker Alan Taylor backs prolonged pause in interest rates
– BoE policymaker Alan Taylor said an “extended hold” in interest rates is the most appropriate policy response to the recent rise in inflationary pressures, arguing that the Middle East conflict has created an external shock that does not warrant an immediate monetary policy reaction
– Taylor noted that current interest rates are already sufficiently restrictive and suggested the Bank of England should allow time for existing policy settings to work through the economy before considering any further adjustments
– His comments reinforce the more cautious view within the Monetary Policy Committee (MPC), emphasising that policymakers should distinguish between temporary, energy-driven inflation and persistent domestic price pressures driven by wages or consumer demand
– Analysts say Taylor’s remarks strengthen expectations that the Bank of England will maintain interest rates at 3.75% for an extended period, unless inflation proves more persistent or geopolitical developments significantly alter the outlook for growth and prices
23 June 2026: Andy Burnham poised to become UK Prime Minister following Starmer’s resignation
– Greater Manchester Mayor Andy Burnham is expected to succeed Prime Minister Keir Starmer as the UK’s next Prime Minister, with preparations underway for discussions with senior civil servants ahead of his anticipated move into Downing Street within weeks
– Burnham’s expected appointment follows Prime Minister Keir Starmer’s decision to step down, marking the beginning of a major political transition at a time when the UK is facing weak economic growth, elevated public borrowing and continued geopolitical uncertainty
– Investors and businesses are closely monitoring Burnham’s policy priorities, particularly his approach to fiscal discipline, public investment and industrial strategy, after he previously sought to reassure markets by committing to responsible management of the public finances
– Analysts say the leadership transition is likely to shape expectations for future economic and fiscal policy, with markets expected to focus on the composition of the new Cabinet, the appointment of the next Chancellor and the government’s plans for taxation, infrastructure spending and long-term growth
23 June 2026: UK tax gap widens to £59.2bn despite stronger enforcement efforts
– The UK’s estimated tax gap widened to £59.2bn in the provisional figures for 2024–25, indicating that the difference between taxes owed and taxes actually collected has increased despite intensified government compliance and enforcement measures
– The rise suggests that HM Revenue & Customs (HMRC) continues to face challenges in tackling tax avoidance, evasion, fraud and non-compliance, particularly as the tax system becomes more complex and economic conditions remain uncertain
– A larger tax gap places additional pressure on the public finances by reducing government revenues at a time of elevated borrowing, higher debt servicing costs and growing demands on public spending
– Analysts say the figures are likely to reinforce calls for further investment in HMRC’s compliance capabilities and greater use of data analytics and digital enforcement tools, while also fuelling debate over whether broader tax policy reforms are needed to improve long-term revenue collection
UK Financial Services Key Transactions
28 June 2026: XPS Group to acquire APR Actuarial Solutions to expand insurance consulting
– XPS Group has agreed to acquire APR Actuarial Solutions, a specialist UK actuarial consultancy serving more than 45 insurers and financial institutions, to accelerate the growth of its insurance consulting practice. The acquisition expands XPS into the general insurance consulting market, adds over 70 client-facing professionals and strengthens its diversification strategy to build a broader financial services consulting platform spanning both life and general insurance
25 June 2026: Openwork and Söderberg emerge as final bidders for Benchmark
– Openwork and Söderberg & Partners have emerged as the two remaining contenders to acquire Benchmark Capital from Schroders, as the sale process enters its final stages. The transaction would represent a major shift in the UK advice and platform market, as both bidders seek to expand adviser networks, discretionary investment capabilities and recurring wealth management revenues through one of the sector’s most closely watched acquisitions
25 June 2026: Exante launches €1m grant for open-source fintech projects
– Multi-asset brokerage Exante has launched a €1 million grant programme to support open-source fintech projects, funding developers building tools for trading infrastructure, financial data, security and developer ecosystems. The initiative aims to accelerate innovation, strengthen collaboration within the fintech community and encourage broader adoption of open-source technologies across global financial services
25 June 2026: Marshmallow joins Percayso and TransUnion data partnership
– Digital insurer Marshmallow has partnered with Percayso Inform and TransUnion to enhance its motor insurance pricing and underwriting capabilities through richer consumer and risk data. The collaboration will improve risk assessment, pricing accuracy and fraud detection, supporting more personalised insurance products while expanding access to cover for underserved customer segments
25 June 2026: Berenberg urges NatWest to preserve Evelyn’s entrepreneurial culture
– Berenberg has backed NatWest’s acquisition of Evelyn Partners but warned that preserving Evelyn’s entrepreneurial culture will be critical to unlocking the deal’s full value. The investment bank believes the combination offers significant growth potential in UK wealth management, provided client relationships, adviser autonomy and the firm’s distinctive operating model are maintained during integration
25 June 2026: Mattioli Woods hits £32bn mark with West Midlands acquisition
– Mattioli Woods has acquired KRD Financial Advisers, strengthening its presence in the West Midlands and increasing group assets to approximately £32 billion. The acquisition expands Mattioli Woods’ regional advisory network and reinforces its private equity-backed growth strategy, continuing consolidation in the UK wealth management sector through targeted acquisitions of established independent advice firms
24 June 2026: Equipal secures £16.25m from Altum Capital Management
– UK asset finance fintech Equipal has secured £16.25 million in combined funding from Altum Capital Management, comprising £1.25 million in equity and a £15 million forward-flow funding facility. The capital will accelerate growth of Equipal’s digital equipment finance platform, expand its technology and commercial teams, and increase lending capacity as it scales financing solutions for UK SMEs purchasing business equipment
24 June 2026: Former JOHCM and Dimensional executives launch sustainable MPS firm
– Former JOHCM and Dimensional Fund Advisors executives Tim Crockford and James Stewart have launched Bamboo Invest, a sustainable model portfolio service (MPS) provider targeting UK advisers. The venture aims to differentiate itself through evidence-based investing and sustainability-focused portfolios, increasing competition in the growing MPS market as adviser demand for responsible investment solutions continues to rise
A Word from Our Founder & Managing Director
How the Bank of England communicates is proving just as consequential as what it decides, and political transition is adding its own layer of uncertainty even as markets have so far taken it in stride. Governance failures like WealthTek are a reminder that growth and oversight must move together. Yet financial services continues to invest, consolidate and build regardless. At HSA Advisory, we help clients translate that conviction into action, bringing senior-led insight to M&A, cross-border growth and capital raising where clarity is in short supply. The message from the Bank may be evolving. The strategy from the sector has not wavered.
Himanshu Singh, Founder & Managing DirectorNew Podcast: M&A Station by Himanshu Singh
The numbers and deals are above. For the human side of the industry behind them, tune into M&A Station. Hosted by Himanshu Singh, Founder of HSA Advisory and CorpFin Hub. IB without the polish. Available on all major platforms including Spotify, Apple Podcasts, Amazon Music and YouTube.
Pulse Check
As the Bank of England embraces more scenario-based communication, will greater transparency improve monetary policy credibility, or make future interest-rate expectations harder for markets to interpret?
We’d love to hear your thoughts.
Source: Financial Times, Reuters, The Times, Insurance Times, Insurance Business UK, The Guardian, Insurance Age, CityWire, FinTech Global.
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