Key Points from the Week:
The UK’s economic recovery hit another rough patch as growth stalled, and that was before the latest energy shock entered the picture.
Escalating Middle East tensions have pushed oil prices higher, clouding the inflation outlook and prompting markets to dial back their Bank of England rate cut expectations. Sterling stayed choppy, equities tracked oil’s swings, and policymakers are now signalling that persistent energy-driven inflation could keep monetary easing on hold just as economic momentum remains fragile.
Yet despite the macro noise, financial services continued to move. Revolut secured its full UK banking licence, a landmark moment that reshapes competitive dynamics in retail banking. WisdomTree acquired Atlantic House and Liontrust struck a deal for River Global, underscoring continued consolidation across asset and wealth management. OakNorth deepened its SME banking capabilities, while fintech funding flows and renewed UK-EU regulatory cooperation signal that structural growth in the sector hasn’t lost its momentum.
The macro backdrop is challenging but the industry is clearly not standing still.
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
16 March 2026: McFadden vows to press on with UK welfare reforms to boost employment
– Cabinet Office minister Pat McFadden said the government will continue pursuing welfare reforms aimed at increasing workforce participation, as ministers seek to address rising inactivity and improve overall labour market performance
– The reforms are expected to focus on incentivising job entry and reducing long-term benefit dependency, particularly among groups currently outside the workforce due to health conditions or structural employment barriers
– Officials argue that boosting employment is critical to supporting economic growth, improving productivity and strengthening public finances by expanding the tax base and reducing welfare spending pressures
– Analysts note that while reforms could help improve labour supply, their effectiveness will depend on implementation, support programmes and broader economic conditions, including job availability and business confidence
16 March 2026: UK plans to curb powers of financial services watchdog
– The UK government is considering plans to limit certain powers of financial regulators, aiming to reduce regulatory burdens and improve competitiveness of the financial services sector
– Proposals are expected to focus on increasing ministerial oversight and ensuring regulators prioritise economic growth alongside their core objectives of financial stability and consumer protection
– Supporters argue the changes could make the UK more attractive for investment and innovation, particularly in financial services and fintech, by streamlining decision-making and reducing compliance costs
– Critics warn that weakening regulatory independence could undermine market confidence and financial stability, raising concerns about the long-term credibility of the UK’s supervisory framework
16 March 2026: MPs and peers call for major review of UK financial regulation
– MPs and members of the House of Lords have called for a comprehensive review of the UK’s financial regulatory framework, arguing that existing structures may no longer be fit for purpose in a rapidly evolving financial landscape
– Lawmakers highlighted concerns over complexity, overlapping responsibilities and unclear accountability between regulators, suggesting that reform could improve efficiency, transparency and overall effectiveness of supervision across financial markets
– The review is expected to consider how regulation can better support economic growth while maintaining strong safeguards for financial stability and consumer protection in the post-Brexit environment
– Analysts say any overhaul will need to balance competitiveness with credibility, as changes to regulatory structures could influence investor confidence and the UK’s standing as a global financial centre
13 March 2026: UK economy ground to halt even before Iran war energy shock
– Official data showed the UK economy recorded zero growth in January, signalling a loss of momentum at the start of the year and surprising economists who had expected modest expansion
– The stagnation followed several months of weak activity, with services flat and only limited gains in manufacturing and construction, reinforcing concerns that the UK remains stuck in a prolonged period of sluggish economic growth
– The slowdown occurred before the escalation of the Iran conflict, meaning the surge in global energy prices now poses an additional risk that could further weaken economic performance in the coming months
– Analysts warn that higher oil prices, which have risen above one hundred dollars per barrel amid the crisis, could increase costs for households and businesses while complicating the Bank of England’s policy outlook
13 March 2026: Reeves to make new push for greater single-market access
– Chancellor Rachel Reeves is preparing a renewed effort to secure improved UK access to the EU single market, aiming to reduce post-Brexit trade frictions and strengthen economic cooperation with Britain’s largest trading partner
– The initiative is expected to focus on sector-specific regulatory alignment, potentially covering industries such as chemicals, financial services and energy, where closer cooperation could ease market barriers and support cross-border investment
– Several EU member states, led by France, are signalling that deeper access to the single market would likely require the UK to contribute financially to the EU budget
– Analysts say the proposal reflects a pragmatic shift in UK policy, prioritising economic benefits and trade efficiency over regulatory divergence, while negotiations may remain politically sensitive both domestically and within EU institutions
13 March 2026: UK economy unexpectedly failed to grow in January
– The UK economy recorded zero growth in January, surprising economists who had expected a modest expansion and highlighting the fragile pace of recovery as businesses and households continue adjusting to higher borrowing costs and uncertain demand
– Weakness across manufacturing and construction contributed to the flat reading, with firms reporting cautious investment and hiring decisions amid subdued domestic demand and lingering uncertainty over the global economic outlook
– Rising global energy prices linked to escalating geopolitical tensions are emerging as a fresh threat to economic momentum, potentially increasing operating costs for businesses while reducing disposable income for households
– Economists say the stagnant growth complicates the Bank of England’s policy outlook, as policymakers must balance fragile economic activity with the risk that higher energy costs could reignite inflation and delay expected interest rate cuts
13 March 2026: Sterling volatile as oil crisis strengthens dollar and clouds outlook
– The British pound headed toward a third consecutive daily decline against the US dollar as rising oil prices and escalating Middle East tensions pushed investors toward safer assets
– Energy market uncertainty has strengthened the dollar, with traders worried that sustained increases in oil prices could trigger another inflation shock across major economies
– Earlier trading had seen sterling edge slightly higher as markets weighed fears of supply disruptions against reports that governments might release strategic oil reserves to stabilise prices
– Analysts say sterling’s direction remains tied closely to energy markets, as higher oil prices could delay Bank of England rate cuts while continued geopolitical tensions keep currency markets volatile
13 March 2026: UK inflation outlook worsens as energy shock and sticky expectations raise risks
– An official from the Office for Budget Responsibility warned that UK inflation could end the year closer to three per cent if energy prices remain elevated, exceeding earlier projections that assumed inflation would fall nearer to the Bank of England’s target
– Rising oil and gas prices linked to the Middle East conflict have increased concerns that energy costs could feed through to transport, heating and production expenses, placing renewed upward pressure on consumer prices
– A Bank of England survey also showed that long-term inflation expectations among the public remained stubbornly elevated even before the latest energy shock, suggesting underlying price pressures may be harder to contain
– Economists warn that persistent inflation expectations combined with higher energy costs could complicate monetary policy, potentially delaying anticipated interest rate cuts and prolonging restrictive financial conditions in the UK economy
12 March 2026: UK equities swing as oil volatility drives sharp shifts in sentiment
– UK equities rebounded initially as oil prices eased on hopes of Middle East de-escalation, improving investor sentiment after recent declines and reducing immediate fears of an energy-driven inflation shock across global markets
– The recovery proved short-lived as renewed attacks on oil and transport infrastructure pushed crude prices higher again, reversing gains and sending UK equities lower as markets reacted to escalating geopolitical risks
– Rising oil prices reignited concerns about inflation, with higher energy costs expected to increase business expenses and household bills, potentially weighing on economic activity and delaying anticipated interest rate cuts
– Analysts say equity markets remain highly sensitive to energy price movements, with continued volatility likely to shape investor sentiment, monetary policy expectations and the broader outlook for global growth in the near term
11 March 2026: UK and EU strengthen financial regulatory cooperation at joint forum
– The UK and EU reaffirmed their commitment to close financial regulatory cooperation at a joint forum in London, emphasising the importance of structured dialogue to support financial stability, market integrity and cross-border investment
– Discussions covered key areas including banking regulation, digital finance, markets reform and sustainable finance, reflecting shared priorities to enhance competitiveness while maintaining robust oversight of financial systems
– Both sides highlighted the need to monitor risks from geopolitical tensions, including the Middle East conflict, and agreed on continued collaboration through international bodies such as the Financial Stability Board and G20
– Policymakers also focused on emerging risks in non-bank financial sectors and digital assets, agreeing to strengthen data sharing, regulatory coordination and resilience frameworks to address vulnerabilities across increasingly interconnected global financial markets
10 March 2026: OBR warns energy price surge could derail UK inflation retreat
– The Office for Budget Responsibility warned that surging oil and gas prices could slow or reverse the UK’s progress in reducing inflation, as higher energy costs risk feeding directly into consumer prices
– The watchdog’s chief economist said an energy-driven inflation shock would deliver a completely unwelcome hit to the UK economy, raising living costs while simultaneously weakening economic growth
– Rising energy prices linked to geopolitical tensions could also complicate the Bank of England’s monetary policy outlook, potentially delaying expected interest rate cuts previously anticipated by financial markets
– Economists warn that sustained increases in oil and gas prices would place additional pressure on household finances and business costs, potentially undermining consumer confidence and slowing the broader economic recovery
10 March 2026: Board games maker to be first private company traded under UK’s ‘Pisces’ system
– Board game producer QPlay, creator of the trivia game Outsmarted, will become the first private company to trade shares using the UK’s new Pisces platform designed to enable trading in privately held companies
– The shares will be traded through a platform operated by JP Jenkins, offering investors periodic liquidity opportunities while allowing the company to remain privately owned rather than pursuing a full public market listing
– Pisces is intended to bridge the gap between private and public markets by providing structured secondary trading windows for private companies, giving early investors and employees opportunities to realise value from their holdings
– Regulators and market participants see the initiative as part of broader efforts to revitalise the UK’s capital markets ecosystem and encourage companies to stay connected to London’s financial infrastructure even before public listing
UK Financial Services Key Transactions
16 March 2026: WisdomTree to acquire Atlantic House in £150m deal
– New York-based asset manager WisdomTree has agreed to acquire London systematic investment boutique Atlantic House for £150 million. The deal strengthens WisdomTree’s ETF and solutions platform by adding defined-outcome and derivatives-based strategies, supporting its expansion in Europe and enhancing product innovation in outcome-oriented investment offerings
16 March 2026: Liontrust strikes £10m deal for Martin Gilbert’s River Global
– Liontrust has agreed to acquire River Global for £10 million in a deal that will see founder Martin Gilbert join the Liontrust board upon completion. The transaction expands Liontrust’s asset management capabilities and distribution reach while bringing Gilbert’s industry experience into the firm’s strategic leadership
13 March 2026: OakNorth acquires Monite to boost business banking tools
– Digital bank OakNorth has acquired the core technology and team of financial management platform Monite to integrate accounts receivable, accounts payable and expense-management capabilities into its business banking offering. The move will underpin OakNorth’s planned finance-automation tools for lower mid-market companies, with the first integrated features expected to launch in Q2 2026
13 March 2026: Insurtech Loxa raises £2.7m seed round to fund EU expansion
– UK insurtech Loxa has secured £2.7 million in seed funding across three tranches to support European expansion, grow its retail partner network and enhance its embedded insurance platform. The company plans to scale to around 150 retail partners and broaden product coverage, enabling retailers to launch tailored embedded insurance programmes through integrated ecommerce platforms
11 March 2026: Outpost raises $17.5m Series A to simplify global trade
– London-based fintech Outpost has raised $17.5 million in a Series A round led by Ribbit, with participation from Better Tomorrow Ventures and angel investors from major fintech firms. The funding will scale its AI-powered “merchant-of-record” platform, which manages cross-border payments, tax and compliance for businesses selling internationally, helping merchants avoid complex global regulatory requirements
11 March 2026: Revolut secures full UK banking licence after years-long wait
– Revolut has received full UK banking authorisation following a prolonged approval process, enabling it to offer core services including current accounts and lending. The licence marks a strategic shift toward becoming a full-service bank, intensifying competition with incumbents as the fintech leverages its large user base, though execution in deposits and lending will be critical to long-term success
11 March 2026: Victory Capital remains committed to acquiring Janus Henderson
– Victory Capital has reaffirmed its commitment to acquiring Janus Henderson despite the asset manager rejecting its third takeover proposal. The bidder signalled it will continue pursuing the deal, highlighting strategic interest in scaling global asset-management platforms and intensifying takeover tensions in the sector
10 March 2026: MFS creditors face $1.8bn shortfall, UK court filings show
– Creditors of collapsed mortgage lender Market Financial Solutions face a shortfall exceeding $1.8 billion, with court filings raising concerns over governance, including lending to connected parties and potential double-pledging of collateral. The case has intensified scrutiny of UK non-bank property lenders, highlighting risks around transparency, oversight and recovery values in specialist finance markets
10 March 2026: £5m GWP broker secures investment from Peter Cullum backed MBP
– A UK insurance broker generating around £5 million in gross written premium has secured strategic investment from Minority Broker Partnerships (MBP), the broker investment vehicle backed by Peter Cullum. The funding will support the firm’s next phase of growth, including targeted acquisitions and organic expansion, reflecting MBP’s strategy of backing entrepreneurial brokers to scale operations in the competitive UK insurance market
10 March 2026: Apollo to launch its first UK Long-Term Asset Fund (LTAF)
– Private credit giant Apollo is set to launch its first UK Long-Term Asset Fund, offering defined contribution pension schemes access to a diversified global private credit portfolio in a semi-liquid structure. The FCA-authorised vehicle focuses on areas such as corporate lending and asset-backed finance, aiming to enhance diversification, income generation and risk-adjusted returns for retirement investors
10 March 2026: Edinburgh Worldwide proposes 100% tender to end Saba stalemate
– Edinburgh Worldwide Investment Trust has proposed a 100% tender offer to resolve its standoff with activist investor Saba Capital. Most proceeds would be returned to shareholders immediately, with around 15% deferred until a crystallisation event linked to SpaceX, reflecting the trust’s exposure to the private holding and efforts to balance liquidity with portfolio realisation
A Word from Our Founder & Managing Director
The UK’s economic outlook is growing more complex by the week. Slowing growth, rising geopolitical risk and renewed inflationary pressure are narrowing the path for policymakers and making the case for monetary easing harder to sustain. Yet within financial services, the structural story remains compelling. Banking competition is intensifying. Capital continues to flow toward technology and infrastructure. Consolidation across asset and wealth management is accelerating. The institutions best placed for sustained growth will be those that hold their strategic nerve through near-term volatility and keep investing in long-term capability.
Himanshu Singh, Founder & Managing DirectorPulse Check
With growth stalling and inflation risks rising again, will structural strength in financial services be enough to offset mounting macroeconomic pressures in the UK?
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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