Key Points from the Week:
The UK economy is showing signs of near-term resilience, but the foundations are fragile. Strong mortgage approvals and consumer lending reflect households bringing forward borrowing decisions ahead of anticipated deterioration rather than genuine confidence in the outlook. Equity markets and sterling have found short-term support from steady rates and earnings strength, but growth forecasts have been cut to below 1% and inflation is expected to remain elevated as energy shocks persist. The Bank of England’s shift to scenario-based forecasting is itself a signal that policy is now reactive rather than anchored to a clear base case. Rate holds at 3.75%, tensions between the BoE and FCA over capital rules, and political proposals ranging from a £15 minimum wage to pension reforms directing capital into UK markets are adding further layers of complexity to an already constrained policy backdrop.
Financial Services activity continues to move with purpose. In wealth, Shackleton has added another acquisition of a firm linked to Gareth Southgate, bringing over £200m in assets to its platform while Julius Baer has identified a £1 trillion MPS opportunity as the industry shifts toward hybrid advice models. Canaccord Wealth’s decision to offer crypto exposure to high-net-worth clients following the lifting of restrictions on crypto ETNs marks a significant moment for digital asset acceptance in mainstream wealth management. In insurance, Aviva acquired DisasterCare to strengthen property claims capabilities, Howden expanded its Irish advisory platform through Maven Financial and Optio entered the Irish construction surety market. In technology and RegTech, Palana and Avanterra merged to create an AI-driven compliance platform targeting the European market, while wealthtech startup Marloo raised $10m to build an AI-powered operating system for financial advisers. Goldman Sachs Asset Management’s restructuring of NN Investment Partners cutting 57 funds and seeing 24 portfolio manager departures is a timely reminder of the operational complexity that large-scale asset management integrations demand.
Welcome to HSA Advisory’s Financial Services Newsletter, your concise roundup of UK macroeconomic developments and financial services transactions.
Sign up to get the newsletter delivered every Tuesday. For insights, M&A support, or advisory discussions, reach out to Himanshu Singh, Founder & Managing Director, at himanshu.singh@hsa-advisory.co.uk
UK Macroeconomics
3 May 2026: Iran war accelerates ‘Regrexit’ as wealthy UK expats reconsider leaving
– A growing number of wealthy UK expats are reconsidering moves abroad in a trend dubbed “Regrexit,” as the Iran war raises security concerns and disrupts the appeal of traditionally popular low-tax destinations such as the UAE
– Data suggests a notable reversal in migration flows, with tens of thousands of Britons leaving the Middle East and around 92,000 returning to the UK following the escalation of the conflict
– Beyond geopolitics, expats cite lifestyle challenges, family pressures and difficulties adapting to overseas environments, weakening the long-term attractiveness of relocation despite tax advantages
– Analysts say the trend highlights how geopolitical risk is reshaping global mobility decisions, with safety, stability and proximity increasingly outweighing tax optimisation in determining where high-net-worth individuals choose to live
1 May 2026: UK goods exports to US remain below pre-tariff levels
– UK goods exports to the United States fell sharply by around 25% immediately after tariffs were introduced in April 2025, and have remained persistently below pre-tariff levels through early 2026, according to official data
– The decline reflects structural disruption to trade flows, with key sectors such as automotive exports particularly affected, as higher tariffs reduced competitiveness and demand in the US market
– Despite a partial trade agreement to ease some levies, exports have not meaningfully recovered, with overall shipments still roughly 15% below pre-tariff levels and monthly values stabilising at lower levels
– Analysts say the tariffs have reshaped UK-US trade dynamics, contributing to a shift from surplus to deficit in goods trade and forcing some exporters to explore alternative markets amid ongoing uncertainty
1 May 2026: UK mortgage approvals rise as lending data signals early resilience
– UK mortgage approvals rose to 63,531 in March, the highest level in four months and above market expectations, indicating stronger-than-anticipated housing demand despite rising uncertainty linked to the Iran conflict
– The increase suggests underlying resilience in the housing market, with borrowers potentially bringing forward purchases in anticipation of higher borrowing costs and further economic disruption driven by rising energy prices
– Consumer lending also expanded at the fastest annual pace in over two years, highlighting continued household credit demand and suggesting that spending activity remained relatively robust at the start of the crisis
– Analysts caution that the strength may prove temporary, as higher mortgage rates and worsening economic conditions linked to the energy shock are expected to dampen housing activity and slow credit growth in the coming months
1 May 2026: Greens pledge £15 minimum wage in broader employment rights push
– The Green Party has pledged to introduce a £15 minimum wage, positioning the proposal as a central plank of its employment rights agenda aimed at boosting living standards and reducing income inequality
– The policy is designed to appeal to trade unions and lower-income voters, alongside commitments to strengthen worker protections, including support for expanded rights around collective action and secondary picketing
– Advocates argue the measure would increase household incomes and stimulate demand, though critics warn it could raise labour costs significantly, particularly for small businesses and labour-intensive sectors
– Analysts say the proposal reflects growing political pressure for higher wages, but its economic impact would depend on implementation, with risks around employment, inflation and business competitiveness likely to shape the debate
1 May 2026: Sterling holds near highs but outlook clouded by rising risks
– Sterling held close to a 10-week high against the US dollar, supported by a weaker dollar and steady Bank of England policy, as markets absorbed a week of central bank decisions and reassessed global risk sentiment
– The pound’s resilience follows mixed performance earlier in the week, gaining against the dollar but weakening against safe-haven currencies like the yen, reflecting persistent caution around geopolitical and macroeconomic risks
– Recent strength has been underpinned by expectations of relatively stable UK interest rates, though the Bank’s warning on energy-driven inflation highlights ongoing uncertainty around the policy outlook
– Analysts caution that the “peak pound” narrative may be emerging, with political uncertainty, persistent inflation and exposure to energy shocks likely to limit further upside and keep the currency vulnerable to shifts in global sentiment
30 April 2026: BoE shifts to scenario-based forecasts amid extreme uncertainty
– The Bank of England moved away from a single central forecast in its April Monetary Policy Report, instead presenting three distinct scenarios to reflect unprecedented uncertainty caused by the Iran-driven energy shock and its economic implications
– Scenario A assumes a short-lived energy shock with weak demand, limiting second-round effects, with inflation peaking slightly above 3.5% in late 2026 before falling back below the 2% target over the following years
– Scenario B, seen by many policymakers as the most likely, assumes energy prices remain elevated for longer, with modest persistence in inflation, requiring interest rates to stay higher than previously expected to stabilise prices
– Scenario C outlines a severe and prolonged shock, with inflation exceeding 6% in 2027 and requiring materially higher interest rates, leading to weaker growth and higher unemployment across the UK economy
30 April 2026: FTSE rebounds on earnings and rate hold, extending recovery from prior losses
– UK equities moved higher, with the FTSE 100 gaining on strong corporate earnings from companies such as Rolls-Royce and Glencore, which helped lift overall market sentiment despite ongoing geopolitical uncertainty
– Mid-cap stocks outperformed, rallying after the Bank of England’s decision to hold interest rates steady, with investors viewing the pause as supportive for domestically focused and rate-sensitive sectors
– The gains build on an earlier rebound where energy stocks, supported by higher oil prices and strong BP results, helped the FTSE break a six-day losing streak driven by Middle East tensions
– Analysts say the recovery reflects a combination of earnings resilience and policy stability, though markets remain vulnerable to external shocks, particularly energy price volatility and geopolitical developments affecting inflation and growth expectations
30 April 2026: BoE and FCA clash over capital rules for trading firms
– A rare regulatory dispute has emerged between the Bank of England and the Financial Conduct Authority over proposals to adjust capital and liquidity requirements for large trading firms such as Jane Street and Citadel Securities
– The FCA is pushing to increase liquidity flexibility for these firms to support market functioning and competitiveness, particularly in wholesale trading and market-making activities within UK financial markets
– The Bank of England has raised concerns that loosening requirements could introduce financial stability risks, particularly during periods of market stress when trading firms play a critical role in liquidity provision
– Analysts say the disagreement highlights broader tensions between growth-oriented regulatory reform and prudential safeguards, with the outcome likely to shape how the UK balances market competitiveness against systemic resilience in its financial framework
30 April 2026: BoE holds rates at 3.75% but signals readiness to act on inflation
– The Bank of England kept interest rates unchanged at 3.75%, maintaining a cautious stance as policymakers assess the impact of the Iran-driven energy shock on inflation and economic growth
– The Monetary Policy Committee warned it remains “ready to act” if inflationary pressures persist, signalling that further rate increases could be considered if higher energy costs feed into broader and more sustained price rises
– This stance aligns with earlier guidance from Governor Andrew Bailey, who emphasised weak labour market conditions and limited corporate pricing power as reasons to avoid immediate tightening despite elevated inflation risks
– Analysts say the decision reflects a delicate balance between controlling inflation and supporting a fragile economy, with future policy moves likely to depend on how persistent energy-driven inflation proves in the coming months
29 April 2026: UK gains powers to steer pension investment toward domestic companies
– UK ministers have secured powers to direct pension funds toward investing more in British companies, aiming to boost domestic capital markets and support economic growth through increased long-term institutional investment
– The move follows a legislative compromise with the House of Lords, with safeguards introduced to ensure pension trustees retain fiduciary duties and are not forced into investments that undermine member outcomes
– The policy reflects broader efforts to mobilise pension capital into productive assets such as infrastructure, private markets and high-growth UK businesses, addressing concerns over underinvestment in domestic equities
– Analysts say while the initiative could deepen UK capital markets, tensions remain between political objectives and fiduciary independence, with execution critical to maintaining trust and ensuring investments deliver appropriate risk-adjusted returns
29 April 2026: NIESR slashes UK growth outlook as Iran war fuels inflation risks
– The National Institute of Economic and Social Research cut UK growth forecasts to around 0.9% for 2026 and 1% for 2027, reflecting a sharp downgrade as the Iran conflict drives a major energy shock
– Inflation is expected to rise further, potentially reaching around 4.1% in early 2027, with price pressures likely to remain above the Bank of England’s 2% target until 2028 due to persistently high oil and gas costs
– The outlook highlights the UK’s structural vulnerability to global energy shocks, with higher import costs reducing real incomes, increasing business expenses and weighing on consumption and investment across the economy
– Analysts warn of a material downside risk, including the possibility of recession if the conflict escalates, with unemployment expected to rise and the Bank of England facing a difficult trade-off between controlling inflation and supporting growth
29 April 2026: Carmaker finance arms challenge FCA’s motor finance redress scheme
– Finance arms of Mercedes-Benz and Volkswagen are among lenders challenging the FCA’s motor finance compensation scheme, appealing against a programme estimated at around £9.1bn over concerns about scope, methodology and financial impact
– The dispute centres on discretionary commission arrangements, with firms arguing the regulator’s proposed redress framework may overstate customer harm and impose disproportionate liabilities across lenders and captive finance providers
– Legal challenges could delay implementation of the scheme, creating uncertainty for both consumers awaiting compensation and firms attempting to assess provisioning and capital impacts linked to potential payouts
– Analysts say the case could set an important precedent for conduct regulation, with implications for how historic mis-selling is assessed and how large-scale redress programmes are structured across the UK financial services sector
28 April 2026: UK population growth downgraded as migration slowdown reshapes outlook
– The UK’s population growth forecast has been revised down, with the Office for National Statistics now expecting the population to reach around 71 million by 2034, significantly lower than previous projections due to reduced migration assumptions
– The downgrade reflects a sharp fall in net migration, which dropped to roughly 204,000 in 2025 from much higher levels previously, marking one of the steepest declines in recent years and altering long-term demographic expectations
– Natural population change is also turning negative, with deaths projected to exceed births, meaning future population growth will rely almost entirely on migration rather than domestic demographic trends
– Analysts warn slower population growth could weigh on the labour force, tax revenues and economic expansion, increasing fiscal pressure and intensifying debates around immigration policy, productivity and long-term economic sustainability
UK Financial Services Key Transactions
1 May 2026: Shackleton acquires Gareth Southgate’s adviser
– Shackleton has acquired a wealth advisory firm linked to Gareth Southgate, adding more than £200 million in assets under advice and management to its platform. The deal strengthens Shackleton’s client base and reinforces its ongoing buy-and-build strategy in the UK wealth sector, targeting scalable growth through selective acquisitions
1 May 2026: Aviva acquires DisasterCare to strengthen disaster recovery and restoration services
– Aviva has acquired DisasterCare Group, a specialist provider connecting insurers with local restoration suppliers, to enhance its end-to-end property claims capabilities. The deal improves speed and efficiency in handling fire and flood damage, enabling quicker recovery for customers while strengthening Aviva’s in-house expertise across disaster recovery, restoration and claims management
30 April 2026: Palana S.A. merges Avanterra to create RegTech leader
– Luxembourg- and London-based Palana S.A. has merged with Avanterra to form an integrated regulatory, compliance and technology platform, combining advisory, managed services and proprietary RegTech capabilities. The unified group, with €20.5 million in revenue and operations across multiple jurisdictions, aims to scale AI-driven compliance, automate regulatory workflows and compete with larger global providers in the European RegTech market
30 April 2026: Howden acquires Maven Financial to expand Irish advisory platform
– Howden has acquired Galway-based Maven Financial Planning to strengthen its financial advisory capabilities and establish a life and pensions presence in western Ireland. The deal expands regional reach, adds an eight-person advisory team and supports Howden’s strategy to build an integrated platform across insurance, pensions and investment advice amid continued intermediary consolidation
30 April 2026: Optio targets European growth with Irish construction surety acquisition
– Optio Group has agreed to acquire Construction Guarantee Underwriters (CGU), an Irish specialist in construction surety and performance bonds, marking its entry into the Irish market. The deal strengthens Optio’s European expansion strategy, adding local underwriting expertise and an established distribution base in a technical, high-barrier segment supporting infrastructure and construction projects
29 April 2026: Canaccord Wealth offers crypto exposure for high-net-worth clients
– Canaccord Wealth has begun offering crypto exposure to affluent clients following the lifting of restrictions on crypto ETNs, marking a significant shift in UK wealth management. The move reflects growing client demand for digital assets and signals broader acceptance of crypto within traditional portfolios, particularly among high-net-worth investors
29 April 2026: Marloo raises $10m seed to transform financial advice
– Wealthtech startup Marloo has secured $10 million in seed funding led by Blackbird Ventures to build an AI-powered operating system for financial advisers. The platform automates compliance, documentation and workflow tasks, enabling advisers to focus on client relationships while scaling capacity, with the new capital earmarked for global expansion and product development
29 April 2026: Tatton boosts UK exposure and cuts Japan in portfolio rebalance
– Tatton has increased its allocation to UK equities while reducing exposure to Japan, citing the UK’s energy and banking sectors as a natural hedge against market volatility. The move reflects a defensive repositioning strategy, leveraging domestic sector strength to enhance resilience amid uncertain global macro conditions
28 April 2026: Julius Baer highlights £1tn MPS opportunity in UK wealth shift
– Julius Baer International’s UK leadership has pointed to a £1 trillion opportunity in the model portfolio service (MPS) market, as the firm balances traditional relationship-led advice with scalable, centralised investment solutions. The strategy reflects broader industry evolution toward hybrid wealth models combining personalisation with operational efficiency
28 April 2026: GSAM overhaul of NNIP sees 57 fund cuts and 24 PM exits
– Goldman Sachs Asset Management has cut 57 funds and seen 24 portfolio manager departures as part of its integration of NN Investment Partners, highlighting the scale of restructuring four years post-acquisition. The overhaul reflects efforts to streamline product ranges and align investment processes, while underscoring cultural and operational challenges in large asset-management integrations
28 April 2026: Blue Owl investors reject Saba’s 35% discount offer
– Fewer than 1% of investors accepted Saba Capital’s offer to buy stakes in a Blue Owl BDC at a 35% discount to net asset value, signalling limited appetite for deep-discount liquidity. Despite the rejection, Saba is reportedly targeting broader opportunities across similar funds, highlighting ongoing tensions around liquidity and valuation in private credit vehicles
A Word from Our Founder & Managing Director
Eight weeks in, and the divergence between a constrained macro environment and an active deal market is no longer a trend, it is a defining characteristic of this cycle. Capital within financial services is not waiting for clarity. It is moving toward scale, technology and structural opportunity with deliberate intent. At HSA Advisory, we work alongside clients navigating exactly that dynamic bringing senior-led insight to M&A, cross-border growth and capital raising where preparation and conviction are the real differentiators. The macro may be front-loaded. The strategic opportunity is not
Himanshu Singh, Founder & Managing DirectorPulse Check
If economic resilience is being driven by front-loaded behaviour rather than sustainable demand, are markets misreading strength, and what happens when that temporary support fades?
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.
Stay informed with our weekly updates on the UK’s financial landscape, providing you with the insights needed to navigate the evolving economic environment
