Foreign investment
In this section, we look at the likely impact of Brexit on foreign direct investment into the United Kingdom. First, we outline the scale of investment into Britain from the European Union. Second, we explore the probable legal and regulatory environment for foreign investment following Brexit and its likely impact on flows of foreign direct investment.
The European Union’s investment in Britain
The European Union is an important source of foreign direct investment for the British economy. In 2013 (the latest year for which data are available), the European Union accounted for 46% of the United Kingdom’s stock of inward foreign direct investment and its share of the overall stock of foreign direct investment has been fairly stable over the past decade. However, inflows of foreign direct investment from European Union countries have been slowing over recent years and more investment has been flowing in from non-member countries. (See Figure 23 and Figure 24.)