Euro debate ‘a damp squib’ as UK investment surges
Britain attracted more inward investment last year than any of her European competitors, consultancy firm Ernst & Young has found.
The UK’s chunk of inward investment in the 15-nation European Union increased to 28 per cent between 2001 and 2002, up 2 per cent on the year. But this is down from the high of 38 per cent in 1998.
Of the 1,895 projects up for grabs last year, a fifth, (19 percent), went to the UK, surpassing rival France, which mustered 13 per cent.
The report comes ahead of Chancellor of the Exchequer Gordon Brown’s verdict on the five economic tests next week, said to be the chief determinant of single currency embrace.
The UK’s investment potential is one such hurdle that Mr. Brown will have to consider, though some say the decision to defer a referendum on the euro has already been made.
But Barry Bright of Ernst & Young said of the UK’s equivocation on whether to cling to sterling or go for euro membership appeared to be ‘a bit of a damp squib.’
‘Whilst there are undoubted financial benefits for the countries within the single currency these appear to be counter-balanced in inward investment terms by concerns over reductions in growth rates in major markets, probably in part due to the loss of some independent national economic levers such as interest rates and exchange rates.
‘The UK, and London in particular, still continue to punch well above their weight in inward investment terms in Europe. To continue to do so, its efforts must not be sidetracked by the euro debate and forget to do the simple things like effective marketing of its flexibility, connectivity and human capital.’
There is some cheer for manufacturing with the news that investment in the UK sector rose by 15%.
But there is not respite for the eurozone in terms of outside competition.
The report also found the number of investment projects in non-EU countries grew by 21%.
