AstraZeneca's exit is a frightening prospect for the City and the government

It's a threat that will send a shiver down the spine of Downing Street and shake the City of London to its core.

Even the notion that AstraZeneca (AZ) - the UK's most valuable listed company - is thinking of upping sticks and switching its stock market listing to America is a frightening prospect on many levels. After all, if your biggest firm departs for Wall Street, what message does it send to an already bruised London stock market that has struggled to find its way since the UK's vote to leave the European Union? Money latest: Cash in your pocket set to change The timing of the report in The Times that Pascal Soriot, the pharmaceutical company's long-standing chief executive, is considering his own Brexit for the company, will not be lost on anyone.

The Treasury is under severe strain and the Starmer government, apparently focused on compromise given its welfare reform U-turns, bruised. Ministers have been scrambling to get the support of business back, after a budget tax raid that has added to the cost of employing people in the UK, by launching a series of strategies to demonstrate a growth-led focus.

Mr Soriot's reported shift is the culmination of years of frustration over UK tax rates and support for business - though it could also remove a focus on his own remuneration as the highest-paid director of a UK-listed firm. AZ has its own gripes with Labour.

In January, the company cancelled a planned £450m investment in a vaccine factory on Merseyside, accusing the government of reneging on the previous Conservative administration's offer of financial aid. At the same time, it has been rebuilding its presence in the United States.

That speaks to not only a home market snub but also the election of a US president intent on protecting, as he sees it, America-based companies and jobs. Donald Trump is threatening 25% tariffs on all pharma imports.

AZ has already promised a $3.5bn (£2.6bn) investment in US manufacturing by the end of 2026. It has also rejoined the leading US drug lobby group, bolstering its voice in Washington DC.

There are sound reasons for bolstering its US footprint; more than 40% of AZ's revenues are made in the world's largest economy. Greater US production would also shield it from any duties imposed by Mr Trump and any MAGA successor.

Since Brexit, complaints among UK stock market constituents have been of low valuations compared to peers (with a weak pound also leaving them vulnerable to takeovers), weaker access to capital and poor appetite for new listings. Wise, the money transfer firm, became the latest UK name to say that it intends to move its primary listing to the US just last month.

If followed through, it would tread in the footsteps of Flutter Entertainment and the building equipment suppler CRH - just two big names to have already left. London was snubbed for a listing by its former chip-designing resident ARM back in 2023.

An initial public offering by Shein, the controversial fast fashion firm, had offered the prospect of the biggest flotation for the UK in many years but that was blocked by the Chinese authorities. Efforts to bolster the City's appeal, such as through the Financial Conduct Authority's overhaul of listing rules and the creation of pension megafunds to aid access to capital, have also been boosted in recent months by investors in US companies taking a second look at comparatively low valuations in Europe.

Market analysts have charted a cash spread away from the US as a hedge against an erratic White House. The Times report suggested that Mr Soriot's plans were likely to face some opposition from members of the board, in addition to the UK government.

AstraZeneca has not commented on the story. Crucially, it did not deny it.

But a government spokesperson said: "Through our forthcoming Life Sciences Sector Plan, we are launching a 10-year mission to harness the life sciences sector to drive long-term economic growth and build a stronger, prevention-focused NHS. "We have already started delivering on key actions, from investing up to £600m in the Health Data Research Service alongside Wellcome, through to committing over £650m in Genomics England and up to £354m in Our Future Health.

"This is clear evidence of our commitment and confidence in life sciences as a driver of both economic growth and better health outcomes." Governments don't comment on stories such as these, but you can bet your bottom dollar that the departure of your biggest firm by market value is not the message a government laser-focused on growth can afford to allow..