How statements of fiscal intent impact on short-term valuations
November 6, 2025
It is now less than three weeks until the Budget.
And following Rachel Reeves’ statement on Tuesday, UK markets turned red – by less than 1% but that’s still not great.
Anecdotally I hear that private company corporate activity is very muted as everyone waits for the real detail on 26 November. Of course, we all still have a lot of work on our desks to finish off, but I suspect that, like us, most new projects now will have a deadline of the end of the year, rather than the end of the month, at the earliest.
Meanwhile, the John Lewis Christmas advert has broken – Where Love Lives | John Lewis & Partners | Christmas Ad 2025. It has a retro 1990’s feel, as well as some heart-warming themes around father son relationships. It’s great, but I am not sure it will lead customers to rush to the shop, thereby increasing John’s Lewis’ valuation.
Personally I would have chosen a different 1990’s iconic song which, whilst it’s not a winter song, does have a thumping beat which might get me strutting to the shops! The Lovin’ Spoonful – Summer in the City (Audio).
That has got me thinking about which tracks a valuations business could use to stimulate lawyers to give us a buzz with a request to quote for some work. 😊
One of the team suggested God Only Knows (Remastered 1999)!
Do you have any songs that you could send your clients that would encourage them to get in touch with some work? If so, let us know and we will publish a complication for Christmas.
Meanwhile back to more serious matters.
Where listed markets lead, private markets will follow. There is an inevitable correlation between them because we tend to use a comparison with quoted company multiples as a one of the methodologies for valuing private companies. Whilst debates rage about private company illiquidity premia and discounts, the truth is that as markets fall or rise, this immediately impacts on the base line assumptions used in the calculations.
So statements by HM Chancellor of the Exchequer matter as much in our world as in that of our close cousins, the analysts behind the buy and sell recommendations in the listed markets. And of course all of us care about fiscal policy because of what it will do to our clients’ profitability, which also inevitably has a degree of impact on the value of a share in that company.
Private company valuations can peak and trough in a very short space of time and big announcements by important people can cause both temporary and longer term issues in this regard.
This is why you have to value on a specific day and only then, if required, form a view on whether the value can hold for a longer period. As news cycles get shorter and there are many more immediate sources of data, the issue is only going to get more pronounced. We are already seeing discussions about the need to move from quarterly to monthly PE and VC fund valuations. Will we get to weekly? Or daily? Will hourly become possible and if so do we need hourly? (Just in case you did not know Athla already has the ability, using our software, to produce valuations hourly).
Whilst we all wait for 26 November these are themes that are worth considering so we can all be more prepared for a world where instantaneous answers will become the norm where previously it was thought unnecessary or impossible.
In the meantime, do call us if you are interested in the topic of how macro events or big announcements by politicians could create valuation opportunities or challenges. Or maybe you have a client in whose interest it is to establish a valuation at a time when quoted comparables are muted.
