Friday 8 March 2019
It’s all about investment. Brexit Britain is seeing cash flow into the economy from all directions. Asset buying from Europe has doubled in two years on the back of a more competitive currency. Norway’s sovereign wealth fund is increasing its interest along with other top financial institutions. Tech is going big with Apple and Google investing in London, while Cambridge stands out worldwide as a place of residence for the globe’s top earners thanks to its extremely successful IT sector.
Britain expanded 1.4% last year, with just 4% unemployment. Meanwhile, Germany and France are on the brink of recession, and the Italian economy is contracting.
It isn’t just unemployment where the UK is outperforming its neighbours. British start-ups raised almost £8 billion in venture capital during 2018 – some 70% more than our French and Germany counterparts.
Analysis from S&P Capital IQ data has shown that buyers from the EU have bought up 553 UK assets through acquisitions and mergers over the past year. European investment has more than doubled over the past few years.
Purchases in companies and stakes have hit $31.1bn, more than twice the level of investment compared to 2016: 454 assets for $13.6bn. Total value in 2017 was $21.2bn…
…No surprise then that Norway’s sovereign wealth, the world’s largest, increasing its exposure to British companies, bonds and property. “We will continue to be significant investors in Britain. We foresee that over time our investments in the UK will increase,” said fund manager Yngve Slyngstad.
“With our time horizon, which is 30 years-plus, current political discussions do not change our view of the situation,” he added.
A year on from announcing their investment in a London ‘innovation centre’ US megabank Citigroup is making plans for an HQ in the capital. “Citi continues to invest in London, a key hub for both cutting edge technological talent and some of our largest investor clients,” explained the group’s chief executive for Europe, Jim Cowles.
Mutual recognition of standards is a massive driver of trade. At present, under the yoke of the EU there’s little scope for breaking down regulatory barriers such as restrictions on chlorinated chicken – big in the US, banned in Europe, even though the EU’s food agency says its fine. A renewed mutual recognition agreement between the UK and the US signals a future intention to deepen trade once Britain eventually escapes from the EU.
Trade between the two countries was worth £184 billion in the year ending Q3 2018 (ONS). The US is also the single biggest source of inward investment into the UK.
London has a greater number of software developers than any other European city, with over 357,900 engineers across the capital.
Laura Citron, CEO of London & Partners said: “Today’s figures demonstrate that London is an open, welcoming city and that the strength of our tech sector is built on the international makeup of our tech workforce.”
Furthermore, Apple is set to open a new London HQ in Battersea in 2020 and Google’s new HQ in King’s Cross will house up to 4,500 staff.
London is now the best city in the world for wealthy individuals to live in.
The UK’s capital has overtaken New York City to become the world’s leading wealth centre. The Knight Frank Wealth report judges cities on criteria including investment and the number of individuals worth over $30m.
Cambridge is also doing particularly well, described as the “UK’s answer to Silicon Valley”. In 2017, the turnover for digital tech business in ‘Silicon Fen’ was £2.4 billion, or £152,000 per employee. Astonishing.