UK Expected to Fall Behind in the Race for FDI

Mickledore is once again preparing to complete the analysis of the EY annual European Foreign Direct Investment data. The data hasn’t arrived yet, but it would be surprising to see the UK keep its crown as the number one location for inward investment – a position that the UK has maintained since the data began (in 1997).

Whatever view on Brexit is held, it has to be recognised that 2019 was not the stable economic environment within which international businesses were likely to make large scale capital investment decisions. The early 2020s will determine whether the increasingly independent UK is a location in which businesses want to continue to invest. The outcome will be crucial for the UK economy – as an open and international economy the UK has a very large number of large international businesses and without their continued investment the economy will start to suffer.

Our view is that much of the inward investment of the last 30+ years has been predicated on access to the European market and as a result, re-investment decisions will increasingly look away from the UK. The result will not be large scale departures, but a gradual diminution of the scale and influence of the investments that have been made in the UK – resulting, over time, in some economic damage.

One of the pieces of work being completed by Mickledore is an analysis of likely import and export tariff structures by economic sector and the economic impact that this will have on different areas of the economy. This is insight that we will bring to inward investment engagements.

Written by Nigel Wilcock, Director of Mickledore

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