Fintech investment in the UK slumped 57 per cent in the first half of the year as rising rates, high inflation and geopolitical tensions dampened investor sentiment.

Total UK fintech investment dropped to $5.9bn (£4.6bn) in the first half of the year, down from $13.8bn in the same period last year, according to data from KPMG.

The UK was part of a global trend, with both the number of deals and their value dropping. Worldwide there were 2,885 deals worth $63.2bn in the second half of last year. This fell to $52.4bn across 2,153 deals in the first half of this year.

In the UK, 215 fintech deals were completed in the first six months, whether through private equity, venture capital or M&A, which was down nearly half on the 392 deals completed last year.

However, the UK remained the European centre for fintech investment with British fintechs attracting more funding than peers in the rest of EMEA.

John Hallsworth, client lead partner for banking and fintech at KPMG UK, said: “Despite a slowdown in UK fintech investment compared to last year, the UK remains at the centre of European fintech innovation with British fintechs attracting over half the funding of Europe.”

Hallsworth noted that the UK is attempting to improve its regulatory environment in order to maintain its lead over European rivals. In particular, he highlighted the government’s approach to crypto regulation as a potential source for future growth.

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