Strong returns in various financial markets and increased trading volumes have benefited businesses in the industry. Companies provide underwriting, brokering and market-making services for different financial instruments, including bonds, stocks and derivatives. Businesses benefited from improving macroeconomic conditions despite the high-interest-rate environment for most of the period due to inflationary pressures. However, the anticipation of interest rate cuts in the current year can limit interest income from fixed-income securities. As interest rates fall, fixed income securities will experience an outflow of capital and equities will experience an inflow of funds. The Fed is monitoring inflation, employment figures and the effects of tariffs along with other economic factors before making rate cut decisions. Overall, revenue has been growing at a CAGR of 8.5% to $491.0 billion over the past five years, including an expected increase of 1.8% in 2025 alone. Industry profit has grown during the same time due to greater interest income from bonds and will comprise 16.2% of revenue in the current year. While many industries struggled at the onset of the period due to economic disruptions stemming from the volatile economic environment and supply chain issues, businesses benefited from the volatility. Primarily, companies have benefited from increased trading activity on behalf of their clients due to fluctuations in asset prices. This has led to higher trade execution fees for firms at the onset of the period. Similarly, debt underwriting increased as many businesses have turned to investment bankers to help raise cash for various ventures. Also, improved scalability of operations, especially regarding trading services conducted by securities intermediaries, has helped increase industry profits. Structural changes have forced the industry's smaller businesses to evolve. Because competing in trading services requires massive investments in technology and compliance, boutique investment banks have alternatively focused on advising in merger and acquisition (M&A) activity. Boutique investment banks' total share of M&A revenue is forecast to grow through the end of 2030. Furthermore, the industry will benefit from improved macroeconomic conditions as inflationary pressures are expected to ease. This will help asset values rise and interest rate levels to be cut, thus allowing operators to generate more from equity underwriting and lending activities. Overall, revenue is forecast to grow at a CAGR of 1.4% to $526.8 billion over the five years to 2030.

Companies in the Investment Banking industry provide financial advisory services, offering their insight on IPOs, M&As and equity and debt security underwriting activity. Competition has been fierce in recent years, with a flood of boutique firms entering the industry as bankers look for healthier rewards than those offered by the more regulated larger investment banks. Growing M&A and IPO activity before 2022-23 ramped up demand for investment banking services, although this momentum lost speed in 2022-23 as access to cheap capital ended. Revenue is expected to contract at a compound annual rate of 8.1% over the five years through 2025-26 to £8 billion, including an expected drop of 0.5% in 2025-26. Profit is also expected to edge downwards in 2025, though it remains high. Capital market activity surged at the height of the COVID-19 pandemic, lifting demand for investment banking services as governments and large international businesses across the world raised capital to fund fiscal stimuli and maintain cash flow levels. The boom in debt and equity markets showed no sign of slowing the next year, with IPO and M&A activity reaching record levels in 2021-22, driving demand for investment bankers’ services. However, in the two years through 2023-24, M&A activity plummeted thanks to rising interest rates, mounting geopolitical tensions and a gloomy economic outlook, which put companies off from seeking takeovers. In 2024-25, M&A activity fared better than IPOs, welcoming improvements in consumer confidence amid interest rate cuts, aiding revenue growth. However, IPOs continued on their downward trajectory as geopolitical uncertainty and high interest rates resulted in many companies delaying listings. Over 2025-26, M&A activity is forecast to continue to climb, but IPO activity may stall as Trump's tariff announcements erode investor sentiment, weighing on revenue growth. Revenue is anticipated to grow at a compound annual rate of 4.5% over the five years through 2030-31 to £10 billion. Deal activity is set to build as lower interest rates make leveraged transactions more attractive. Competition will remain fierce, driving technological innovation as investment banks try to improve decision-making processes and scale operations through the use of AI. Still, strong competition from overseas exchanges, like the S&P 500 in the US, will dent UK IPO activity in the coming years as companies move away from UK listings and the lacklustre valuations they offer, weighing on revenue growth.