Nery Alaev discusses post-Brexit Britain’s investment environment.
There has been a surge of overseas investment into the UK in the 2015-16 financial year (April to April), with Latin American investment surging by over 200%.
Today, I’m looking at the news and asking the question: will this be the same post-Brexit?
The increase may be thanks to UK Government efforts to reach out to international investors. According to UK International Trade Minister Liam Fox:
“We’ve broadened our reach with emerging markets across the world to cement our position as the number one destination in Europe for investment.’’
If Mr. Fox is to be believed, then the actions of the UK Government have paid off well. Not only has there been a 240% increase in investment from Latin America, there has been a 131% increase in investment from Eastern Europe. The USA remained the number one source of outside financing, with China and India in second and third place respectively.
The shadow of Brexit
Despite this, post-Brexit uncertainty looms large over the UK economy. Will this affect investment, even from outside the EU?
Adam Marshall of the British Chambers of Commerce says:
“As Britain approaches a time of economic change, we must continue to welcome investors that are willing to make a sustained, long-term commitment all across the country.’’
Adding to this, in a BBC piece, Simon French of Panmure Gordon says:
„What will be far more important than Brexit will be whether the political forces that shaped the vote to leave also put pressure on the UK to be a more closed/protectionist nation.
This would have much larger (negative) ramifications for future inward investment flows.“
Mr. French’s comment implies that politics will play a large role in the UK’s economy. This is unlike Spain for example, where the country has seen growth sans Government.
In summary, good news for the UK – but uncertain times are ahead.
Nery Alaev is the current Director of ESN Investments GmbH, which engages in acquisition and development of commercial and residential property in Germany and Austria