Our survey predicts renewed deals activity in 2026

Our exclusive new survey has found a marked increase in optimism among the region’s corporate finance community, with almost two-thirds of advisers and funders predicting a rise in most major deal types this year.

The findings are detailed in PKF Francis Clark’s annual deals review, which also provides in‑depth analysis of transaction activity across the UK and the South and South West region during 2025.

Against a backdrop of economic uncertainty, shifting tax policy and subdued trading conditions, UK deal volumes fell significantly during 2025 – down 16% nationally and 14% in the region covered by our nine offices across the South of England.

Despite the slowdown, PKF Francis Clark continued to advise on transactions across a broad range of sectors, with total deal values rising even as volumes fell, reflecting increased activity in larger and more complex mandates.

2025 deals market: a year defined by uncertainty

The report highlights several factors that contributed to the decline in transaction volumes, including:

• Uncertainty arising from fiscal and economic policy changes
• Adverse trading performance in many sectors either delayed, restructured or aborted the transaction
• Higher interest rates and above‑trend inflation, which continued to affect affordability and investor appetite
• More intensive due diligence processes, extending timelines as buyers sought reassurance in a risk‑averse market

Acquisitions and disposals remained the dominant deal type, making up nearly three‑quarters of all transactions in the PKF Francis Clark region, compared with 61% across the UK.

PKF Francis Clark: resilience in a challenging market

Despite market headwinds, PKF Francis Clark maintained its position as the region’s leading adviser on regional deals, with higher aggregate deal values compared to 2024. We continued to invest in our award-winning corporate finance team, including the promotion of three new partners (below, from left): Matt Willmott, Nick Tippett and Rob Gear.

The team saw a broad spread of activity across sectors such as energy and infrastructure, technology, healthcare, manufacturing and business services. This sustained performance reflects their depth of sector expertise and focus on early preparation, robust due diligence and creative problem‑solving.

2026 outlook: renewed optimism among advisers and funders

Our survey of advisers and funders found a marked rise in confidence compared with the previous year:

• Almost two‑thirds of respondents expect transactional activity – including business sales, management buyouts and equity raisings – to increase in 2026
• Optimism is strongest in energy, waste and infrastructure, where net zero commitments and energy security are driving investment
• Valuations are expected to remain broadly stable
• The biggest factors influencing deal activity in 2026 are anticipated to be UK economic confidence, the availability and cost of funding, and private equity

However, respondents still expect challenges: trading performance issues, shifting buyer appetite and more rigorous due diligence continue to be the main causes of deals failing to complete.

Andy Killick, partner and head of corporate finance at PKF Francis Clark, said: “Several contrasting factors may drive higher transaction volumes in 2026. Funders have significant dry powder, and private equity continues to face pressure to invest. Combined with the need for professionals to complete deals, these forces suggest that – barring major geopolitical shocks – 2026 is likely to be more active. We may even see increased activity before tax rates rise again in April.”

He added: “There is growing interest in using AI and automation tools in transaction analysis. However, for many SME transactions, where human judgement and relationships matter, understanding the nuances of each situation remains essential. In my view, relationships still matter most – it is better to have advisers who genuinely care about your transaction.”

Read the full report: Deals review 2025/26.