Ladbrokes-owner Entain and Aston Martin are among a handful of firms facing the chopping block in the upcoming quarterly reshuffle of the London market indices.

Entain is set to fall out of the FTSE 100 following a bruising period, made worse by the increase of taxes on bookmakers. Demotion from the FTSE 100 typically means reduced visibility among the large institutional funds that track the index, which can weigh on a company's shareholder base.

The betting business "has battled with high UK gambling taxes, increased competition, and slower than expected growth in the US," Dan Coatsworth, head of markets at AJ Bell, said.

A new 25 per cent betting levy – introduced under former Chancellor Rachel Reeves – will take effect from April 2027 and target remote and online betting. From April 2026, Reeves also raised the remote gaming duty, which applies to online casino-style games, to 40 per cent from 21 per cent.

Entain said the changes could reduce its earnings by roughly £100m in 2026 and £150m annually from 2027, even after it took steps to reduce marketing spend and promotions. Entain also holds a joint venture in the US market, BetMGM, where it has faced intense competition from rivals such as FanDuel and DraftKings, a factor behind the slower-than-expected US growth cited by analysts.

Housebuilder Persimmon is expected to join the betting company in relegation, which Coatsworth described as "a sign of the times amid a depressed property market". UK housebuilders have been contending with elevated mortgage rates and softening demand, pressures that have weighed on the sector's valuation. Earlier this year, the firm flagged concern over inflationary pressures in its supply chain, which it expects to affect its bottom line in the second half of the year.

Skyfall from FTSE 250 for Aston Martin

Slated to replace the pair is oil and gas firm Ithaca, which has enjoyed a rally on the back of elevated energy prices from the US-Iran war, and Easyjet. The low-cost airline's shares have surged ahead of its £5.7bn takeover by asset manager Apollo, a deal that will see it picked off the London market. Such takeovers of listed firms have contributed to a shrinking pool of large London-listed companies, a long-running concern for the UK market's competitiveness.

On the FTSE 250, Aston Martin is tipped to drop off the mid-cap index after a painful few years.

The luxury car firm, known for its association with James Bond films, said it would axe 20 per cent of its workforce earlier this year after its net losses swelled 52 per cent to nearly £500m. It blamed part of its woes on "extremely disruptive" US tariffs as well as "extremely subdued" demand in China, the world's biggest car market.

The Warwickshire-headquartered firm employs around 3,000 people, meaning job losses will total around 600. Aston Martin has repeatedly tapped investors for cash in recent years to shore up its balance sheet, a backdrop to the concerns Coatsworth highlighted.

"Aston Martin continues to struggle on the stock market as investors worry about the state of its finances," Coatsworth said.

The changes will be based on market close data from the 1 September trading session. Those moving will be announced after the market closes the following day. Index reviews such as this one are conducted quarterly, with constituents added or removed based on market capitalisation, meaning the reshuffle reflects shifting investor valuations rather than a judgment on the companies' underlying businesses.