The UK stock market is facing a significant downturn, prompting urgent action from Chancellor Rachel Reeves to prevent a potential collapse.

The London Stock Exchange is experiencing its largest exodus of companies since the financial crisis, with many UK firms opting to list in New York instead.

Notable companies like Ashtead Group and CRH have recently switched their listings from London to New York, raising concerns about Shell's potential move.

In 2023, UK initial public offerings (IPOs) raised only £790 million, a 9% decline from the previous year, while US IPOs surpassed $40 billion.

This year is projected to see the fewest company listings in the UK in 15 years, as firms increasingly seek to raise capital in the US.

Firms are hesitant to float in the UK due to limited access to capital and lower valuations compared to the US market.

The US market is becoming more attractive, especially with anticipated corporate tax cuts under the new administration, contrasting with Labour's proposed tax increases.

Foreign investors are taking advantage of low UK valuations, acquiring well-known brands like Morrisons and Virgin Money.

In response to the crisis, the London Stock Exchange has initiated reforms, while Labour proposes creating 'pension megafunds' to boost investment in UK businesses.

The UK stock market, once the third largest globally in 2013, has plummeted to 20th place by 2023, falling behind countries like Oman and Turkey.

Analysts warn of a 'doom loop' where the UK market's poor performance leads to further disinterest from investors, exacerbating the situation.