The sharp fall in the value of the pound and scrapping of banker bonuses may lead to a flurry of foreign takeovers of UK startups from the US and beyond, analysts have said.
The pound’s drop followed Chancellor Kwasi Kwarteng’s mini-budget, which included unfunded tax cuts and caused sterling to dip as low as $1.03 against the dollar on 26 September.
While the pound has since recovered following a £65bn intervention from Bank of England, historically it remains in a weakened state. It is down by 16% since this time last year, when it was worth $1.36, and has been on a downward trajectory since May 2021.
The recent and historic strengthening of the dollar against a weak pound makes it more attractive for US companies to acquire UK startups. Faced with a takeover offer, founders may be more likely to opt for an earlier exit than take the company up to an initial public offering (IPO)....