Brexit infographic: myth 5 - foreign investment
Myth 5: foreign investors will withdraw from the UK if it leaves the EU.
There are concerns that foreign investors will withdraw from the UK if the country leaves the EU. So far it is difficult to conclude that even the prospect of Brexit is slowing the flow of inward investment — across a number of measures, 2014 was a record year. Surveys indicate that research and development will be the focus of investment projects over the coming years — an area for which the UK is very attractive.
Yet there are some concerns. For example, in Ernst & Young’s 2015 UK attractiveness survey, 72% of investors highlighted that UK membership of the single market is at least ‘fairly’ important to the UK’s attraction as an investment destination. Although it is difficult to forecast the long-term implications of Brexit, we do not expect an outflow of foreign investment in the short to medium term. That said, uncertainty could postpone inflows, particularly in the financial sector, and sterling could suffer an increase in volatility as a result.