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[...] Most surveys since the Brexit vote point to the likelihood of buoyant post-Brexit FDI. For example, the annual business survey conducted for the World Economic Forum by PwC found the majority of the UK’s CEOs to be very positive about the UK’s prospects. A recent survey by Colliers International found that London is set to remain the most attractive location for FDI among 20 world cities.
Surveys of investors show that EU membership, in any case, tends to feature low down the list of important factors that affect investment. The UK also has many advantages that will be unaffected by Brexit such as the English language, light regulation, highly developed capital markets, strong rule of law, and flexible labor markets.
Since the Brexit vote, foreign investors have continued to open headquarters in the country. On October 27, 2016, Nissan confirmed that it will build new models at its Sunderland plant, following unspecified “support and assurances” from the British government. Announcements from Boeing, GlaxoSmithKline, Google, Facebook, Apple, Jaguar Land Rover, Tata, and McDonald’s have all indicated that these companies will continue to invest in the UK despite Brexit.
In addition to the UK’s traditional location advantages, several factors suggest that FDI flows to the UK post-Brexit will continue to be robust. A weakened pound will boost FDI inflows. FDI will also be encouraged by the country’s political stability and by the new opportunity to deregulate. Strong FDI inflows will also depend on government policies such as cuts in the corporate tax rate, investment in infrastructure and the pursuit of new trade deals across the globe. The government and the Bank of England will have to dampen inflationary pressures that threaten growth. Above all, the government will need to reduce uncertainty by outlining a clear goal for post-Brexit relations with the EU and by expeditious negotiations with the EU on Brexit after Article 50 is triggered.