Conclusion
FDI must be a priority for new Labour government
While the UK continues to face headwinds, FDI remains a crucial driver for economic prosperity.
Policymakers and business leaders must recognise the importance of attracting foreign investment to support economic growth, by creating an investor-friendly environment and promoting strategic partnerships.
The Harrington Review – a policy paper on how the UK could better attract FDI into growth sectors – criticised the previous government’s approach to FDI.
Following the general election, a renewed focus on FDI is needed. And Labour seems to have put this high on its agenda, with HM Trade Commissioner Chris Barton pointing to four actions to drive forward international investment. They are:
1
Economic growth – addressing the economic slump outlined in this report will be the party’s key priority. Announcements have already been made around domestic housebuilding, leveraging renewable energy and the creation of a sovereign wealth fund, suggesting that new avenues are being explored to give the economy a much-needed boost.
2
Adapting UK domestic policy – they’ll launch a new industrial strategy and address issues relating to planning and connectivity, which would boost scores under our local infrastructure pillar.
3
Cross-border collaboration – the party will look update trade rules and promote cooperation.
4
Deepening ties with Europe – Labour will look to reset the relationship, reducing red tape associated with trade to/from the continent, cooperating on things such as defence and security.
The King’s Speech made further reference to the final objective, stating that the government will
“seek to reset the relationship with European partners and work to improve the United Kingdom’s trade and investment relationship with the European Union.”
As 2024 progresses, falling interest rates and lower inflation, coupled with potential optimism around the new government, should see deal activity improve modestly.
While London continues to be the top city for investment attractiveness, other cities across the UK are showing promising trends.
Investors looking to invest in the UK should consider these emerging hotspots, which offer a combination of growth potential, local skills, and robust infrastructure.
Despite the economic challenges, the resilience and growth shown by these cities underscore the diverse investment opportunities available across the UK.
The new Government has said that it will be taking immediate action to fix the foundations of the economy and according to our findings, this is going to be crucial if the UK is to enhance its attractiveness to foreign investment.
Bryan Bletso, Head of International
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