Post Brexit: Companies are Reluctant to Invest

(https://www.ft.com/content/cf51e840-7147-11e7-93ff-99f383b09ff9)

Business investment in the UK has barely grown since the referendum (referendum or EU
referendum or also known as Brexit referendum (took place on 23 June 2016)). Business
investment continues to disappoint, with the volume of plant, machinery and new buildings
having barely grown in the UK since the EU referendum.

An economy at full employment is normally one that stimulates plenty of new business
investment, as companies adopt new technologies to keep expanding without hiring new staff.

This was happening until mid-decade, but since then a combination of the drop in oil prices and
the uncertainties surrounding the 2014 Scottish independence referendum, the 2015 election
and the 2016 EU referendum have caused companies to think twice before committing
themselves.

The latest data show a downbeat picture, with investment only 2 per cent higher than at the time
of the Brexit vote and 0.2 per cent lower than a year ago.
Before referendum, the BoE (Bank of England) had expected business investment to have grown
more than 13 per cent over the two-year period from 2016.

Investors still mark down UK assets

(https://www.ft.com/content/cf51e840-7147-11e7-93ff-99f383b09ff9)

Uk stocks have performed poorly since the Brexit vote. The performance of stock market reflect
investors’ views of a country’s economic potential. International investment in UK shares is best
measured in dollar terms by the FTSE 250 index, which is made up by companies that
collectively get most of their revenues from the UK. This has slid 0.3 per cent since the 2016
Brexit vote. (in sterling terms it has risen 12 per cent.)

In the meantime the stock markets of other developed economies have risen 26 per cent,
showing that investors have devalued UK assets.
Europeans double UK investment since Brexit vote

(https://www.telegraph.co.uk/business/2019/03/03/europeans-double-uk-investment-since-
brexit-vote/ )

European investors are taking major bets on the UK economy, more than doubling investment
in Britain over the past three years.

Uncertainty around Brexit has not stopped compan

Useful links

https://cep.lse.ac.uk/pubs/download/brexit03.pdf

https://www.cnbc.com/2018/11/01/brexit-could-cause-serious-damage-for-foreign-
investment-into-the-uk-new-study-says.html

https://www.ey.com/Publication/vwLUAssets/EY-Inward-investment-after-Brexit/$FILE/EY-
Inward-investment-after-Brexit.pdf