Around 1,900 deals were completed across Britain this year, down 20 per cent compared to 2012, according to the figures from EY.
Total deal values fell even further, from $129bn to $80bn, a drop of 40 per cent.
The UK statistics are in contrast to Germany and France, where values have risen 36 per cent and 40 per cent respectively this year.
“M&A activity both globally and in the UK has remained bleak. Deal inertia has continued in 2013 as many companies opted to spectate rather than participate in the M&A market,” EY’s Jon Hughes said.
Elsewhere, deals completed in the US rose 27 per cent while China’s deal values rose 38 per cent.