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Saturday September 22nd, 2018 9:05PM

London mayor upbeat about tech despite investment concerns

By The Associated Press
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LONDON (AP) — London Mayor Sadiq Khan says he's optimistic the city will continue to draw investors after Brexit as a survey showed Britain's attractiveness as a destination for foreign direct investment dimmed last year.

The U.K. slipped to third place in a survey of 450 global investors by EY, the accounting and consulting partnership. Some 52 percent said Britain was an attractive place to invest, down 3 percentage points from the previous year. Germany topped the survey at 66 percent, followed by France at 56 percent.

While the survey found declining investment in London's financial services sector, traditionally the city's economic powerhouse, Khan highlighted the recent success of the technology industry. Foreign direct investment funded 320 projects in Britain last year, an increase of 23 percent from 2016, EY said. Two-thirds of the projects were in London.

"We are the tech capital of Europe, but there's no need to be complacent," Khan told The Associated Press at the launch of London Tech Week. "But I see Paris and Berlin as complementing and collaborating with us rather than literally as competitors we've got to be cutthroat with. I think it's not a bad thing for us to have other tech hubs in Europe."

The survey was less rosy about Britain's overall attractiveness amid concerns about the country's departure from the European Union.

The U.K.'s share of projects funded by foreign direct investment fell last year, although the country remained Europe's biggest destination for such projects, the survey found.

While the number of projects in Britain rose 6 percent to 1,205 last year, that lagged the overall European growth rate of 10 percent. In particular, France surged 31 percent to 1,019 projects, boosted by optimism about President Emmanuel Macron's economic policies.

That left Britain with 18 percent of Europe's projects, down from 21 percent in 2015, the year before the country voted to leave the EU.

The survey also underscores Brexit's impact on the financial services industry, with banks and investment companies moving some operations to mainland Europe to ensure they have access to the EU's market of 500 million people after Britain leaves the bloc.

The number of foreign direct investment projects in U.K. financial services fell 26 percent last year, even as the overall European market expanded 13 percent, the survey showed.

The EU report said that the U.K.'s foreign direct investment performance "shows an economy in transition as a result of the move to Brexit and technological change."

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Economy, AP Business - Industries, AP Business - Financial Services, AP Business - Personal Finance
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