Foreign investment in to the UK has reached record levels this year despite the Brexit vote in June. As many economic commentators were expressing concern about how the economy would fare in the wake of the decision to leave the European Union, the news has been welcomed.
The Department for International Trade recorded 2,213 inward investment projects, up 11% on the previous year. The data shows the UK is the most popular destination in the European Union for overseas firms. The report suggested that 116,000 jobs were created or safeguarded by overseas investment last year. The US remains the biggest source of inward investment, accounting for 570 projects, followed by China with 156 and India with 140.
The current financial year has already seen one high profile foreign deal, with the purchase of UK computer chip designer ARM Holdings by Japan’s Softbank for £24bn. The figures cover a period before June’s vote to leave the European Union and building new trade relationships is seen as a key part of Britain’s future outside the bloc.
Investment in to UK property from overseas has also seen a large leap as foreign investors are keen to make the most of cheap exchange rates and low interest rates. Yields and capital gains have also remained strong amid the Brexit turmoil and this has fuelled inward investment.
There was also other good news for the UK as it was announced that every region of the UK is better off than it was a year ago, according to a new study that found Scotland enjoyed the biggest rise in prosperity last year, beating London and several other booming English cities.
Despite uncertain economic conditions during the year caused by volatile stock markets, China’s slowdown and the lead up to Brexit, Barclays’ latest prosperity index found that no region’s overall prosperity declined last year, despite recent reports that wages have fallen for many in real terms. This study, which examines a raft of measures including average annual pay, local house prices, small business growth rates and even things like charitable giving, showed that while London continues to be the UK’s most prosperous city, others are also emerging as prosperity hotspots.
It found that Manchester and Sheffield saw some of the largest increases in small and medium-sized enterprise turnover at 15%, and 11% respectively – compared with 7% in London. Yorkshire saw the second biggest rise in the number of new businesses created with a 1.8% increase, second only to London. At an average age of 45 years old, Manchester has the youngest business owners in the UK, compared with average age 50 in places such as Guildford and Cambridge.
Leeds, Cambridge and Liverpool have the highest proportion of female entrepreneurs in UK cities – at 29%. Leeds came out on top for cities when it comes to increase in average earnings, rising by 6% last year, followed by Newcastle, where earnings rose by 5%. Earnings in London dropped 1% over the same period.
These are all positive results for the UK economy and the Northern Powerhouse communities especially as Manchester, Leeds, and Liverpool continue to grow quickly. Off-plan property in the cities is leading the charge as construction continues to boom. It’s impossible to tell how the economy will definitively look after article 50 is triggered but based on these figures and projections things should remain rosy.