03 February 2017
Foreign investment in Britain trails global average
Britain is lagging behind in the foreign investment stakes by almost a fifth, a new study suggests.
Latest figures showing foreign direct investment (FDI) as a percentage of gross domestic product (GDP), show the UK is performing at around 1.8%, according to research by accountancy group UHY Hacker Young.
Ongoing economic uncertainty triggered by June's decision to leave the EU is likely to be deterring multinational corporations from investing in the UK, the report warns.
Last month, Prime Minister Theresa May hailed the UK as a "hub for foreign investment" as she addressed the World Economic Forum in Davos, Switzerland.
Ms May said: "A Global Britain is no less British because we are a hub for foreign investment. Indeed, our biggest manufacturer, Tata, is Indian. And you still can't get more British than a Jaguar or a Land Rover."
However, some leading banks have indicated that they plan to move business from Britain, with HSBC announcing its plans to shift 1,000 jobs from London to Paris.
The UHY report also shows that there has been almost a two-thirds (60%) increase in foreign direct investment into Bric economies - which include Brazil, Russia, India and China.
Meanwhile G7 economies - Britain, America, Canada, France, Germany, Italy and Japan - are falling behind in the FDI stakes.
Brazil topped the UHY list of the top 45 FDI counties at 4.2% of GDP, while China came in second at 2.3%.
Overall, the FDI average of Bric nations stood at $93.9bn (£75.19bn) for 2015, dwarfing the G7 nations' figure of 1.7%.
Bernard Fay, Chairman of UHY, said: "Despite the slowdown in emerging markets, BRIC economies are continuing to attract significant amounts of FDI - while the G7 is falling behind.
"G7 economies could benefit from making themselves more attractive locations for foreign investment. One way to do this would be to make their tax regimes more favourable, by lowering corporate tax rates or introducing other incentives for multinationals to establish or expand operations there."