Foreign investment expected to fall 37% post-Brexit
Foreign investment into the UK is now predicted to fall by 37% post-Brexit, a 50% increase over previous estimates, as a result of leaving the EU single market and customs union, finds a new study by UCL and LSE economists. The peer-reviewed study, which is forthcoming in the Journal of Common Market Studies, highlights that the single market, since its implementation in 1992, has been the 'cornerstone' for additional foreign direct investment (FDI). Nauro Campos, Professor of Economics at UCL, said: "Over the last 20 years the UK has been the largest recipient of inward FDI in the EU. "Access to the single market and customs union has been instrumental; with entry into a larger market and the opportunity to exploit scale economies without hefty tariffs and red tape. With Brexit we estimate a significant and substantial decrease in FDI." FDI is defined as investment in an enterprise operating in a foreign economy which gives control of the management to the overseas company. FDI is in its essence not just a flow of capital but of technology, knowledge and innovation and its impact is long-lasting. As of 2018, the net value of FDI* into the UK was worth £49.3 billion, down from £80.6 billion in 2017, with foreign investors using the UK as a platform to export to the rest of the Single Market.
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