Covid and Brexit would break a lot of countries. Especially a tiny group of Islands like the UK – about the size of Gabon and Guinea and one tenth the size of Greenland. Even Oregon is bigger than Britain, and the UK can fit into Australia’s Queensland state, seven times. But let’s not forget the people – there are more Brits than there are Spaniards, even though Spain is much larger. Actually more Brits than there are Frenchies. Phew. In fact in Europe only Germany has more people. (I don’t count Turkey and Russia in Europe as they’re also in Asia).
So why do people and companies invest here? Including, especially from India? India is the second largest investor in the UK. Indian companies invested in 99 projects and created 4,830 jobs in Britain to retain India's position as the second-largest source of foreign direct investment (FDI) after the US.
The Rise and Rise of the UK as an Investment Destination
Despite worries about Brexit and the COVID-19 pandemic, the UK has defied analysts and continues to cement its place as a premier investment destination. Foreign direct investment (FDI) is increasing despite challenging global conditions, with British infrastructure and companies reaping the rewards.
Shelter From The Storm
With productivity, GDP and unemployment levels on the decline worldwide due to the pandemic, politically stable regions with robust judicial frameworks become increasingly attractive.
KPMG have reported that VC investment into scale-ups doubled at the start of 2020, while foreign investment in London real estate performed strongly in 2020, according to estate agency Knight Frank. London outshined Paris and Manhattan for inward property investment, boosted by a series of eye-catching deals like the $380 purchase of The Cabot in Canary Wharf by Hong Kong-based firm Link.
The Benefits of the UK for Inward Investment
The UK has a long tradition of providing a stable base for domestic and international companies. When there is some level of uncertainty in the broader markets, investors look to mitigate risk by dealing in known and proven quantities. The UK’s educated and multi-cultural workforce, strong property market, reputation for innovation and opportunity, and a diverse set of well-positioned assets has ensured the attention of foreign direct investment.
Regulatory Commitments
Chancellor of the Exchequer, Rishi Sunak, has committed to improving the UK’s already strong position as an equities listing destination through public market reform. He believes that by reducing free float requirements and modernising listing rules, the UK can attract more inward equities investment when combined with its strong corporate governance standards.
Resilience During the Pandemic
Ernst & Young's recent UK Attractiveness Survey continued to paint a rosy picture for UK financial services — which has been the most attractive European destination for decades. The recent report has allayed fears that Brexit and the pandemic will change this position by reporting that the country has attracted double the amount of financial services investment projects as Germany in recent years.
Modernising, Repositioning and Future Opportunities
The E&Y report provides more exciting news about investor sentiment about the UK as it modernises its economy and repositions itself globally. Indeed, the UK is regarded as more resilient by global investors, with only 3% suggesting that COVID has derailed investment plans.
Another huge growth area is digital tech, with the UK attracting over 30% of the entire European investment market.
Tiny island, big punch. I think 2022 will be good. By the time you read the next one of my articles I will have received at Windsor Castle my OBE for services to the Economy – this is an easy economy to attract investment into. My team with which I work in Government have together brought in companies to the UK which have added over a billion pounds in market capitalisation and investment.
