The broader macro environment in Q1 2026 posed genuine headwinds. President Trump's tariff announcements – including a threatened 10% levy on UK goods – impacted business confidence from the outset of the year, with the British Chambers of Commerce reporting that “confidence among firms remained fragile, heading into the Iran conflict, with labour and energy costs weighing on investment”. Growth forecasts were revised down across major institutions, with the OECD lowering its UK GDP projection to 1.2% for 2026 due to the continued effect of budgetary tightening on consumption and the drag from global uncertainty.
Despite this, the UK deal market continued to function – with several notable mid-market deals of real quality completed across a wide range of sectors.
Sector Trends
Q1 2026 deal volumes were lower across most sectors compared to Q4 2025, but the picture was more nuanced beneath the headline numbers, with pockets of resilience and one sector recording an increase in activity.
Business Support Services was the standout performer in Q1 2026, recording 59 transactions – an 11% rise in the 53 deals completed in Q4 2025, and the only sector to increase deal count quarter-on-quarter. This reflects continued consolidation activity driven by technology-enabled service businesses, where strategic and PE-backed acquirers remain acquisitive.
The Industrials sector remained the most active by volume in Q1 2026, with 219 transactions – a decline of 10% on Q4 2025 but still accounting for 28% of all deals in the quarter. The largest disclosed Industrials transaction* was the take-private of SolGold plc at £752m, while the acquisition of APEM Group for £335m underscored continued appetite for quality mid-market assets. Despite the macro noise, consolidation dynamics across engineering, construction and business services sub-sectors continue to support deal flow.
The Tech sector experienced a modest fall in deal count from 101 to 87, a fall of 14%. A standout transaction was Accenture’s acquisition of Faculty Science Limited for £728m – one of the largest mid-market tech transactions of the quarter and a further signal of sustained appetite for high-quality UK AI and data businesses.
