Companies are holding off on investments in the light of uncertainty over a Brexit trade deal. The IMF has forecasted lower growth in 2018 than previous years at 1.6% compared to 1.8% in 2016. After narrowly voting to leave the EU in 2016 Britain saw the pound plummet by 9% against the dollar and stay down.
However, Forbes has released its ‘Best Countries for Business 2018’ with the UK topping the list for the first time.
The UK economy as a whole has held up well with GDP growing at 1.8% in 2016, it was only just behind Germany’s 1.9% growth among the group of seven industrialised nations. Economic growth continued in 2017. House prices rose and unemployment is at a 42 year low.
It is Forbes’ 12th Annual survey of the best countries for business and shows that Britain’s business climate remains attractive.
Last year Britain was at number 5 on the list. The UK ranked in the top 25 countries, out of 153 measured in each of the 15 metrics tracked apart from political risk where it ended up at number 28.
Belief across industries, in the long-term strength of the UK economy, was signalled by large companies such as Wells Fargo investing $400million to buy new European Headquarters in London’s financial district and Apple who announced plans to open a new London campus in 2021 that will cover nearly 500,000 square feet of space. Facebook is also looking for 700,000 square feet to accommodate 9,000 employees.
Other factors scoring highly for the UK were technological readiness where it was 4th and the size and education of its workforce, 3rd. It has the fifth largest economy in the world at $2.6 trillion. London’s financial services is one of three global hubs and the central hub for European financial services. Post Brexit there will be opportunity for a few European cities to challenge London but each has deficiencies. However, as companies’ plans for Brexit unfold the UK could lose as many as 10,000 banking jobs with some companies primed to move their headquarters to the EU. Frankfurt, Paris and Dublin are amongst those spots for companies looking to ensure access to the single market.
Matthew De Luca, a strategic consultant with Cushman & Wakefield said “The single biggest issue Britain will face is the frictionless participation in their economy of highly educated global talent. Talent is the key that unlocks innovation, growth, and competitiveness.”
Forbes determined the Best Countries for Business by rating 153 nations on 15 different factors including property rights, innovation, taxes, technology, corruption, freedom (personal, trade and monetary), red tape and investor protection. Each category was equally weighted.
“We tweaked our methodology this year for the first time in a decade after conversations with multiple site-selection experts. Stock market performance is out, and we added workforce, infrastructure, market size, quality of life and political risk to provide a better gauge of how attractive a country is for capital investment. The data is based on published reports from Freedom House, Heritage Foundation, Property Rights Alliance, United Nations, Transparency International, World Bank Group, Aon, Marsh & McLennan and World Economic Forum.”
Suren Thiru, head of economics and business finance at the British Chambers of Commerce, said in response: “The UK’s ranking as the best country for doing business is a testament to the hard-work and resilience of business communities across the UK.
“The UK remains a great place start and establish a business with low barriers to entry and a good reputation for business-friendly regulation and enforcement.
“However, in order to boost growth and productivity over the long-term, the UK must do more to support firms on their growth journey, including addressing the longstanding issues around skills shortage and our creaking infrastructure.
“Firms will repay that backing with investment, hiring, training and export growth.”