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Concierges range from fictional hotel fixer Monsieur Gustave to the archetypal jobsworth who spies on French apartment dwellers. The UK will hope a new investment minister will resemble the former, though perhaps be less heavily perfumed. This supremo will lead a revamped “concierge service” intended to spur flagging inward investment.
The number of foreign direct investment projects into the UK has fallen since Britain voted to leave the EU in 2016. By some other measures, FDI is at record highs. UK FDI is also far from the worst performing internationally.
Official data shows that the UK secured 1,654 projects in the 12 months to March this year, 27 per cent fewer than in 2016-17. Overall project numbers have fallen across Europe in recent years, according to EY data.
The picture is prettier when delineated in invested capital. About $100bn of new projects were recorded last year, double the figure at the time of the Brexit vote, according to data from fDi Markets.
Most of the money went into renewable energy projects. That is good for the environment, but not so good for employment.
Project numbers have been lost at the margins, thinks Peter Arnold, EY’s UK chief economist, because the UK no longer offers easy access to the EU’s single market.
Investment returns appear relatively healthy. The average annual income earned on FDI stock by 26 developed economies was 6 per cent between 2018 and 2021. Returns for Switzerland, Belgium and Norway, which are relatively small investors in Britain, were double the average.
US businesses, the largest category of investor in the UK, made 5 per cent annually between 2013 and 2021. Their returns were only 3.4 per cent in France and 4 per cent in Germany.
Footloose investors should brace themselves for a bombardment of brochures from the UK, once a favoured destination for foreign manufacturers. These will extol the nation’s work ethic as well as its wind speeds. However, subsidies available under the US’s Inflation Reduction Act, which has an estimated value of $1.2tn, will count for more with many corporate strategists.
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