The latest research from the Global Payroll Alliance (GPA reveals that the number of UK mergers and acquisitions increased by almost 22% in Q2 2025, but this is still not enough to stop 2025 from having the lowest quarterly acquisition average of the past four years.

The analysis of ONS data* shows that in June 2025 (latest available data), there were 147 mergers and acquisitions (M&As) involving UK businesses. This marks an increase of 6.5% compared to May’s total of 138 which itself marked a worrying monthly decline of more than -36%.

This gentle recovery offers a glimmer of positivity for the state of UK enterprise as it means the M&A total for Q2 stands at 501, a quarterly increase of 21.6%, following the dramatic decline of -17.1% seen in Q1.

However, this total still puts 2025 on track to have the worst quarterly M&A average for at least the past four years.

This year’s average number of quarterly M&As stands at 456.5, down -6.8% on last year’s average of 489.8, and down -12.6% from 2022 (522.3).

Melanie Pizzey, CEO and Founder of the Global Payroll Alliance, commented:

“A decline in UK business involvement in mergers and acquisitions is a clear indicator of falling confidence in the country’s economic outlook. Elevated interest rates, persistent inflation, regulatory uncertainty, and questions around future trade relationships are all making investors more cautious.

When UK businesses struggle to attract buyers or partners, it reflects concerns about their growth potential and, more broadly, about the UK’s standing in the global business landscape. Over time, this can damage the country’s reputation as an investment destination. And now, with the Autumn Budget fast approaching, many businesses are already fearing the worst as Labour plots ways to increase its tax revenue. We’ve already seen Merck leave the UK, and it looks like many other UK businesses and entrepreneurs are escaping for a better life in the Middle East.

All of this filters down to jobs and wages. When companies are unable to grow or secure strategic investment through M&A, it limits their ability to scale operations, expand their workforce, or offer competitive pay. In this way, reduced deal activity has real consequences for the wider economy.”