In the United Kingdom, “the “frosty” effect of Brexit on investments”

2023-11-28 06:00:08

These are anecdotes, rumors, almost nothing, but they say a lot about the collapse of the United Kingdom’s image in international business circles. Little jokes which remind us that the economic reputation of a country can collapse very quickly. After almost seven years of incessant internal battles over Brexit, five prime ministers, seven chancellors of the Exchequer, eight business ministers, investors no longer understand anything.

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Thus, during a dinner, it is the boss of a European railway group present in the United Kingdom who shrugs his shoulders, looking blasé, in the face of the British fiasco of his second TGV line, which was to connect London in Manchester, but will finally stop in Birmingham, halfway. “It was going to be called HS2, High Speed ​​2, because it was the second high-speed line in the country. It will rather be HS1.5, or even HS1.25…” He no longer has any confidence in the current British government and its constant instability. “For now, we are staying in this country, and we are waiting to see the next government [les législatives doivent avoir lieu au plus tard le 28 janvier 2025]. »

Another confidence between pear and cheese, this time from a French ready-to-wear boss, who draws up a long list of problems posed by Brexit: he had to change his supply chain, his paperwork has become heavier and hiring is more difficult due to lack of personnel. More unexpectedly, tourists are spending less in the capital because the British government has abolished tax relief at the border since Brexit. “London has long been the essential city for international shopping, where the big brands absolutely had to behe explains. But, more and more, it is happening in Paris. » Listening to him, the luxury stores on Regent Street, one of the city’s central arteries, are now struggling.

Disbelief then denigration

Certainly, these two bosses have not left the United Kingdom. The country remains the sixth largest economy on the planet, just ahead of France. Its world-renowned universities, its leading biotech and pharmaceutical industry, its internationally renowned cultural companies, particularly in television production, constitute obvious assets.

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But in this small world of international business, something has broken. Until 2016, the United Kingdom was much admired there. This feeling was replaced by disbelief and then denigration. Is that bad ? Dave Ramsden, Deputy Governor of the Bank of England, recalled, on November 21, before a parliamentary committee, the effect « glacial » that Brexit has had on investment. “We have seen a break in investment by British companies since 2016 [année du référendum]. Of course, there may be a variety of explanations, but there has only been a 6% increase in investment in seven years. » He adds, to reinforce his point, that one “One of the main factors for investment is certainty”. However, the permanent political fluctuations, the never-ending negotiations on Brexit, the succession of ministers reinforce uncertainties that are otherwise very strong (pandemic, war in Ukraine, inflation, etc.).

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