British pessimism is stalling growth
British leaders are now the least optimistic cohort internationally, and it’s having a real-world impact on growth, writes David Stevens
Britain has long prided itself on being one of the world’s most dynamic financial centres, a place where capital moves, innovation scales and global businesses choose to grow. Yet beneath that historic confidence lies a more recent uncomfortable truth: the UK has become the most risk-averse investment market in the world.
New research by SIX surveying nearly 300 senior financial professionals across seven global markets reveals the extent of this shift. UK respondents stand out as the most risk-averse of all regions with almost half (47 per cent) citing investor reluctance to take risk as their biggest barrier to growth, compared with a global average of just 32 per cent. Simply put, lack of risk appetite is now one of the biggest obstacles to business growth in the UK.
This risk aversion shapes not just capital flows, but sentiment. While globally, 58 per cent of executives say market uncertainty presents an opportunity; in the UK, half say it represents a challenge. British leaders are now the least optimistic cohort internationally. Taken together, the findings point to a deeper cultural and strategic conservatism: a preference for stability, rules and safeguards over innovation, ambition and upside.
And this is no abstract trend, it has real-world consequences. UK growth companies increasingly find that after strong early-stage support, they are struggling to find scale-up capital at home. Too many businesses with global potential reach their high-growth phase just as domestic funding dries up. The result is value creation, and often listings, migrating offshore.
The UK public has also been effectively “regulated out” of public markets. Retail investors find it increasingly difficult to access growth stocks, while £1.8 trillion sits idle in cash savings. Improving financial literacy, rebuilding confidence and simplifying participation in equity markets must form part of any attempt to restore a healthy national risk culture.
This has become a national debate, and rightly so. Many UK business leaders argue that sluggish capital markets are the product of over-regulation and an over-prioritisation of consumer protection. No one disputes the importance of safeguarding the public; it is a cornerstone of trust in the financial system. But when caution becomes the defining principle, capital stops flowing to the businesses that need it most. Protecting money starts to matter more than deploying it productively. And the result is stagnation, not security.
How do we make Brits braver?
Half of UK executives say that “striking the right balance between deregulation and risk tolerance” is their top long-term regulatory concern. This is almost double the global average. Even those inside the system believe the pendulum has swung too far. The cumulative effect is a culture of hesitation, where entrepreneurs pause and investors retreat. Unless the UK recalibrates, falling risk appetite could erode its position as a premier global financial centre.
So what should be done? The solution is not to dismantle regulation, but to restore confidence in responsible risk-taking, the kind of informed, disciplined investment that drives growth without compromising stability. That requires four shifts in policy and mindset.
First, the UK must actively promote responsible risk-taking by incentivising investment in high-growth sectors and evolving tax schemes to support long-term capital, not just short-term liquidity.
Second, regulators should facilitate innovation by providing clarity. Businesses are not asking for looser rules, simply more predictable ones. A system that combines stability with flexibility invites participation instead of deterring it.
Third, the UK must strengthen the infrastructure of its capital markets, from readiness for T+1 settlement to coordinated regulatory guidance. Strong financial plumbing builds strong confidence.
Fourth, policymakers should define a national risk appetite, providing an explicit statement of how the UK balances prudence with growth. Other industries do this as standard; financial markets should too.
A renewed balance between risk and reward would not only strengthen UK competitiveness, but ensure challenger exchanges, smaller companies and retail investors can participate meaningfully, creating a more dynamic, more inclusiv and more future-facing capital market.
David Stevens is CEO of Aquis Exchange