Investment in ‘Global Britain’ – gain, retain … or risk economic pain?

This is a preview from the National Institute Economic Review, August 2019, no 249.

In this box, prepared by NIESR's economists Arno Hantzsche and David Nguyen, we highlight the importance of reinvestments alongside new investment projects and shows that to bolster future welfare, policy should not only focus on publicity-generating new investor arrivals but also create an economic environment that encourages current foreign investors to retain and expand their existing investments in the UK. This is of particular relevance in the context of the government’s ambition to advance the UK’s position after Brexit as an outward-looking economy.

"If the slowdown of FDI were to continue in the future, this would pose an important risk for employment and productivity in the UK. Investment data suggests that the focus should as much be on retaining current investors as on attracting new ones from around the globe".