In the spring of 1882, with the tribulations of the City of Glasgow Bank behind him, William Mackinnon returned to London determined to pick up the threads of various affairs that he had been compelled to set aside, and to play an active part again in the business and political life of the metropolis. He arrived back at an interesting moment. Gladstone's Liberal government was already struggling with the two great issues – relations with Ireland and with Egypt – that would directly or indirectly dominate much of British politics in the 1880s. Of the two, Egypt had the greater relevance for William Mackinnon, whose political attitudes and values were largely determined by foreign and imperial affairs which had a bearing on his business activities and aspirations. The British invasion of Egypt in August 1882, to put down the nationalist movement led by Arabi Pasha, was the first of three major events that transformed Great Power relations in the 1880s. It was quickly followed by the onset of international trade depression in 1883–4 and by Germany's bid for colonial possessions in various parts of the tropical world in 1884–5. The 1880s and 1890s became decades of heightened rivalry between state systems, expressed mainly in a competition for colonial territories. They were also a time of intensified competition between shipping companies of various nationalities, and the struggle to create or extend liner routes across the world's oceans and seas were in turn linked with strategic considerations about the transport and communications systems needed to maintain and extend overseas empire. Maritime enterprise and imperial power became ever closer bed-fellows, and a new stage emerged in William Mackinnon's involvement with the politics of imperialism.

The invasion of Egypt triggered the scramble for colonial possessions in Africa, and aroused suspicions about Britain's imperialist appetites among rulers of Muslim states across the Middle East. These were, of course, regions in which the Mackinnon group's operations were already intertwined with the maintenance of British influence. The edifice of British consular authority in East Africa and the Persian Gulf supported by the mail steamers of the British India S.N. Co and by the commercial presence of Gray Dawes & Co subsidiaries could hardly avoid the backwash from events in Egypt.