Analysis of London Stock Exchange data by investment bank Goodbody revealed the travel and leisure sector experienced one of the largest drops in new capital raises during the first half of 2022.

In total, businesses in the sector raised £531 million during the six months to 30 June. This is down from £2.5 billion in the second half of 2021 and £2.2 billion in the first half.

Goodbody said this represented a 75% year-on-year decline, which came as "economic headwinds bite" – including an "unprecedented rise in costs and dampening consumer demand".

It added concerns over growth and inflation had been compounded by Russia’s invasion of Ukraine and "economic uncertainty", despite output growth rising "following the dwindling impact of the pandemic".

"The sector has already started to see the effects of inflation and rising costs, as purchasing power and consumer demand begins to wane," said Goodbody.

UK-listed corporates raised £5.7 billion during the first half of the year, "the slowest start to a year in nearly a decade".

Goodbody said the outlook came in contrast to the past two years, where firms readily turned to investors. "Those raising capital are most doing so on a needs must basis," said Piers Coombs, head of Goodbody’s London office.

"Looking ahead, while it is impossible to say with certainty when activity will begin to pick up, our view is that this will happen once there is more clarity on the interest rate cycle in Europe and the US and, importantly, some visibility on inflationary pressures subsiding," he continued, adding this could yet come before the end of the year.