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UK no longer one of top 5 countries to invest in after Brexit | |
(about 1 hour later) | |
Britain has lost its place as one of the world’s top investment destinations in the wake of the Brexit vote, according to a survey of 1,700 leading business executives. The UK has fallen to seventh on the list, the first time it has failed to make the top five. | Britain has lost its place as one of the world’s top investment destinations in the wake of the Brexit vote, according to a survey of 1,700 leading business executives. The UK has fallen to seventh on the list, the first time it has failed to make the top five. |
“Brexit is a prominent example of the rise of geopolitical changes that are adding complexity to cross-border investments,” Steve Kouskos of EY said, adding that the volatility of exchange rates also dampened deals. The pound has lost almost a fifth of its value against the dollar since the June vote. | “Brexit is a prominent example of the rise of geopolitical changes that are adding complexity to cross-border investments,” Steve Kouskos of EY said, adding that the volatility of exchange rates also dampened deals. The pound has lost almost a fifth of its value against the dollar since the June vote. |
The value of mergers and acquisitions involving UK companies has dropped by more than half this year, but EY said it expects this to pick up. | The value of mergers and acquisitions involving UK companies has dropped by more than half this year, but EY said it expects this to pick up. |
“In the longer term, we would expect the UK to bounce back as a top M&A destination of choice, but the short-term uncertainty is giving investors pause for thought,“ Kouskos said. “Political uncertainty is an impediment not a barrier to M&A. | “In the longer term, we would expect the UK to bounce back as a top M&A destination of choice, but the short-term uncertainty is giving investors pause for thought,“ Kouskos said. “Political uncertainty is an impediment not a barrier to M&A. |
“The UK remains a formidable economy with great talent, great assets and a long history of innovation and success”. | “The UK remains a formidable economy with great talent, great assets and a long history of innovation and success”. |
The survey of 1,700 executives in 45 countries 57 per cent of companies expect to pursue deals in the next 12 months, up from 50 per cent in April. | The survey of 1,700 executives in 45 countries 57 per cent of companies expect to pursue deals in the next 12 months, up from 50 per cent in April. |
EY said this was because takeovers are seen as a quick way to generate growth in a low-growth world economy. | EY said this was because takeovers are seen as a quick way to generate growth in a low-growth world economy. |
Almost half of companies have more than five deals in the pipeline and the majority are seeking deals in the $250 million and $1 billion range. Blockbuster takeovers such as SoftBank’s £24 billion takeover of ARM are likely to be thin on the ground as firms pursue smaller, “smarter” acquisitions, the report said. | Almost half of companies have more than five deals in the pipeline and the majority are seeking deals in the $250 million and $1 billion range. Blockbuster takeovers such as SoftBank’s £24 billion takeover of ARM are likely to be thin on the ground as firms pursue smaller, “smarter” acquisitions, the report said. |
The news comes as it was revealed today that the Government is considering paying billions to retain access to the single market for financial services. |
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