Foreign Direct Investment between the US and UK has stalled
Foreign Direct Investment (FDI) between the US and UK has stalled, risking economic growth, say leading audit, tax and business advisory firm, Blick Rothenberg.
Jim Brown, COO at the firm, said: “The latest statistics from The Department for Business and Trade show that US investment into the UK grew by 1.4% and investment from the UK into the US by only 0.3%. This is concerning as FDI levels are even more of a concern than trade for long term economic growth.”
He added: “Both countries have benefited greatly from such investment in the past, which creates jobs and supports businesses to expand internationally, but the current uncertainty about long-term regulation and taxation in relation to cross border matters seems to have hit investor confidence.”
Jim said: “However, the period covered by these statistics is pre the introduction of the ‘Liberation Day’ tariffs on 2 April. Although many of the tariffs were deferred, tariffs and in some cases just the threat of tariffs, will have had a significant impact on trade and likely FDI levels, as uncertainty causes investors to lose confidence. The next trade statistics where we may see this play out are expected in mid-September, for the period to the end of June.”
He added: “Before the introduction of tariffs there were significant increases in trade levels. Overall, the trade for the four quarters to the end of Q1 2025 was 6.8% up on the same period a year earlier. In this same period imports to the UK were up 5.4% and exports to the US were up by 7.8%.”
Jim said: “US companies with global interests, including in the UK, were no doubt stockpiling ahead of tariffs being introduced, but others have struggled since to pass on all of the increased costs to their customers. Hopefully FDI levels will not follow the trend, and are buoyed by the US UK trade deal, as they are a vital lifeline for cross border growth.”