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Brexit vote not deterring investors

PwC analysis suggests UK's impending exit from the European Union has not put investors off doing business here

The UK’s impending exit from the European Union has not put investors off doing business in the UK, according to new research.

Analysis by PwC from interviews and data spanning more than 500 investment professionals and over 1,300 CEOs, found that the UK has moved up to third place as an important country for growth this year, equal with Germany and behind only the USA and China.

Hilary Eastman, head of global investor engagement at PwC, said: “Those focussed on the technology and financials industries in particular put the UK among the top three.”

However, she cautioned that the term ‘importance’ may not mean positive growth, noting: “Some investment professionals we spoke to saw that ‘importance’ could also be interpreted in a negative sense – that problems and greater volatility in the UK, for example, could have an important effect on slowing down companies’ growth.”

Globally, uncertainty remains, with 80% of investment professionals viewing geopolitical instability as the top threat to company growth prospects. Protectionism, the future of the Eurozone and social instability also ranked highly.

Ms. Eastman added: “Investment professionals around the world are upbeat about global economic growth prospects, despite recognising the shifting political landscape in which companies operate.

“But… investors do think it is becoming harder for business leaders to balance competing in an open global marketplace with trends toward closed national policies.

“Investors and analysts want companies to understand the markets they enter, act in socially responsible ways and support local economies.”

Communication is a key factor in keeping investors positive about the effect of geopolitics on growth. Companies failing to give clear explanations on how they see global economic prospects and in turn the affect they will have on their own growth prospects came in highly as impacting investors’ decisions.

Cyber security, IT outages and disruptions and data privacy breaches were the top investor concerns surrounding digital issues that could negatively impact stakeholder trust.

Ms Eastman concluded: “There is evidence of an expectation gap, with investment professionals wanting companies to focus simply on running the business. It points to CEOs’ needing to explain their thinking more clearly so that investment professionals’ views become more closely aligned with theirs.”

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