The attractiveness of the UK to foreign investors could suffer in the long-term after Brexit, a survey by consultant EY has found.
The research of thousands of investors found that the outlook for 2017 remains robust, but concerns are growing for the medium and longer term.
In 2017 the UK retained its place as Europe’s number one destination of foreign direct investment (FDI) projects ahead of Germany, with a 7% rise in total projects to 1,144 – the highest number on record.
The results are included in a 35-page report, Time to Act, published by EY this week.
However, the rise in project numbers was below the increase across Europe, which recorded a rise of 15%, says the report.
On a positive note, the proportion of investors planning to establish or expand operations in the UK over the coming year is 24%, in line with the results over the past seven years.
However, the study shows that 31% of investors expect the UK’s attractiveness to FDI to decline over the coming three years, while 32% expect it to improve.
Says the report: “While these figures are a marginal improvement from October 2016, they are significantly worse than both the long-term average and the high point of 2013 when 65% of investors had a positive three-year view of the UK.”
Writing in the report, EY’s infrastructure leader Malcolm Bairstow, said the UK must focus on having “world-class and connected infrastructure”, but that “this is unlikely to be achieved unless the sector can attract foreign direct investment and private finance to support both capital investment and infrastructure operations”.
He cited the “unpredictability” of the UK’s planning process and the “time and cost of getting things done” as the biggest barriers to investor confidence.
