LONDON, June 4 (Xinhua) — Concerns over Brexit have reduced the United Kingdom’s (UK) appeal as a destination for foreign direct investment (FDI). In 2018, the country suffered a 13 percent decline in the number of FDI projects compared to the year before, an EY report said on Tuesday.
While the UK remains the top destination for FDI in Europe, the number of such projects it attracted dropped from 1,205 in 2017 to 1,054 in 2018, mainly due to a 35 percent decrease in the number of manufacturing FDI projects, according to EY’s European Attractiveness Survey 2019.
Andy Baldwin, EY Europe, Middle East, India and Africa (EMEIA) area managing partner, said: “The UK’s historical competitive advantage in FDI has been eroded over the last three years largely due to Brexit, which means that thousands of new jobs have not been created.
“While competitive advantages remain, such as a flexible labor market and the rule of law, the persistent uncertainty experienced over the last three years is turning investors elsewhere as they are no longer willing to take a wait-and-see approach on Brexit negotiations,” Baldwin said.
The EY survey showed that international investors have the highest level of pessimism over the UK’s future attractiveness ever recorded in these surveys, with 15 percent of international investors in the UK saying they have put their investment plans on hold since the Brexit referendum.
However, EY said there is no reason to worry about an immediate crisis: the UK remains an attractive investment destination, as only 6 percent of investors are currently considering relocating their operations to Europe, and the proportion of those planning further investments in the UK has declined only marginally.
“The UK still has a window of opportunity in which it can build on its proven strengths by implementing responses aimed at maintaining its long-term attractiveness to FDI,” EY said.
The UK’s departure from the EU has been postponed from the original March 29, 2019 deadline to Oct. 31, more than three years after the British people voted in a referendum to leave the bloc.