Foreign Investment in U.K. Finance Set to Drop on Covid, Brexit

(Bloomberg) — Big financial services firms are set to avoid investing in British businesses next year, discouraged by the uncertainties of Brexit and the Covid-19 pandemic.

Only 10% of of global financial services firms are planning to establish or expand operations in the U.K. in the coming year, down from 45% in April, according to a report by consultancy EY published Monday.

“U.K. financial services entered the pandemic in a very strong position, having led the rest of Europe in attracting overseas investment over the past 20 years,” said Omar Ali, U.K. financial services managing partner at EY.

The decline in appetite suggests the sector’s absence from the European Union trade talks “may have started to affect investor sentiment,” Ali said, while Covid-19 has made government support and infrastructure more important for those looking to invest.

The poll of 220 decision-makers painted a rosier picture in the medium term, with 53% expecting the U.K. to be more attractive for foreign direct investment in three years’ time.

©2020 Bloomberg L.P.

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