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UK again stands second in attracting foreign investment after France

UK again stands second in attracting foreign investment after France
UK again stands second in attracting foreign investment after France

For the second year in a row, the United Kingdom reportedly stood second to France in terms of being the most popular destination in Europe for foreign investors. This comes amid disruptions from the COVID-19 pandemic as well as Brexit.

As per accountancy firm EY, during the year 2020, the United Kingdom procured 975 inward investment projects in comparison to a total of 985 secured by France.

According to reliable sources, the primary intent of the UK’s Conservative government is attracting foreign investment to a “global Britain”. Leaders of the Conservative government argued that leaving the European Union would make the United Kingdom a more attractive destination.

For the sake of attracting inward investments, the government has set up an Office for Investment. However, it has also made easier to intervene in foreign acquisitions on grounds of national security.

For the Annual Survey of Foreign Investments’ first eighteen years, the United Kingdom had dominated FDIs (Foreign Direct Investments) into Europe. However, the country lost its position for the first time to France in the year 2019.

This came as enterprises grappled with uncertain prospects regarding a trade agreement between the EU and the UK. A last-minute agreement was struck on the Christmas Eve of 2020. This was merely a week prior to the departure of the UK from the single market of the European Union.

As per a statement by EY, the reduction in investments from countries comprising Japan indicated that “the appeal of the United Kingdom as an export base is much less as compared to what it was” due to Brexit. Upturns in investments from other nations outside Japan, the United States, and the European Union may not be of a scale for compensating for lower activity in the conventional base, added reports.

However, it is to be noted that the pandemic resulted in a huge fall in international investments at the global level. As stated by the trade body of the United Nations, global FDI recorded a fall of 42% in the year 2020.

Source credit: https://www.theguardian.com/business/2021/jun/07/uk-second-to-france-again-for-attracting-foreign-investment-in-europe-brexit-covid-19

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