UK may lose $82 billion of investment due to Brexit
The United Kingdom is likely to lose more than $82 billion (65.5 billion pounds) of investment due to Britain’s shock vote to leave the European Union, a study shows.
The research, released on Monday, showed that the Brexit referendum of this summer has convinced many British businesses to abandon or delay their investment plans.
The study was based on a research from the British think tank Center for Business and Economics Research (CEBR), Japan’s Hitachi Capital and online pollsters YouGov.
They recently interviewed 1,015 company bosses about investment decisions since the June 23 referendum in which nearly 52 percent of British voters opted to leave the EU, in hopes of taking back control over their borders and having more economic freedom.
About one-third of those decision makers said that they had either postponed or canceled investment because of the Brexit vote.
They cited the fall of the British pound and rising inflation as main reasons behind these investment decisions.
They were also concerned over Britain’s future membership of the European single market, and over the country’s economic well-being in the wake of Brexit.
“Based on the responses given by businesses on the value of their investment altered for reasons related to Brexit, we estimate the total value of abandoned and delayed investments since Brexit to be 65.5 billion [pounds],” CEBR said in a statement.
“This reflects delays and cancellations to future investment, as well as current investment,” it added.
The think tank stated that “the industry whose firms were most likely to say they had delayed or abandoned investment because of Brexit-related factors was IT and telecoms.”
According to economists at the National Institute of Economic and Social Research, inflation in the UK will increase by 3 percentage points, from a current rate of 1 percent to almost 4 percent in 2017.
The reason, the economists gave, is the dramatic fall in the value of the pound because the Brexit vote will make imports more expensive.
The pound sterling has fallen by about 18 percent since Britain’s vote to exit the EU, the lowest level in 168 years. The Bank of England has signaled it may cut interest rates again later this year.