Norton Rose, the UK law firm, is predicting that the UK will lead the expected increase in mergers and acquisitions activity once the markets stabilise.

Many financial and legal advisers have been reluctant to predict a speedy recovery in the M&A markets in recent months because of the high level of political and economic uncertainty. Some advisers will only commit to saying the markets will probably improve in the second half of 2002, so long as the equity capital markets regain some of their health.