After a record amount of mergers and acquisitions in Europe this year, it would be easy to envisage a slower pace of activity next year. But that is not the view in the City. Indeed, at least three of the top investment banks have issued notes in recent days with essentially the same message: there is no end in sight to the M&A boom.

The UK may not have seen as much corporate activity as some continental European markets but a steady stream of takeovers has been one of the key factors behind the FTSE All Share's 10.8 per cent rise this year. The biggest deals completed in the last year include the £10.1bn purchase of BAA, the airports operator, by Spain's Ferrovial; the £3.8bn takeover of P&O by Dubai Ports World, and the £17.7bn takeover of telecommunications operator 02 by Spain's Telefónica. But it is in the mid-caps sector that activity has been particularly buoyant. The past few weeks have seen bids for AWG, the utility group: Viridian, Northern Ireland's main electricity supplier; and John Laing, the schools, roads and hospitals builder.