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Foreign Investment In Uk Falls By Half

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Foreign investment in UK falls by half

Britain saw inward investment slump by half last year as the recession deterred foreign companies from doing business in the UK. British firms also concentrated on their home market and overseas investment collapsed as the pound fell.

The latest world investment report from the UN Conference on Trade and Development (Unctad), shows that investment in Britain was hit much harder by the global downturn than almost any other country. It marks a sharp change of fortunes for the UK, which has long liked to boast that it grabs the lion's share of foreign investment flowing into the European Union.

Investment into Britain fell by half to £97bn, while outflows, or British companies making investments abroad, collapsed to £111bn from £275bn the year before. The United States, by contrast, saw inflows rise last year to $318bn (£193bn) from $271bn, while outflows fell by a relatively modest $66bn to $312bn.

Brian Shaw, of the government's trade promotion body, UK Trade & Investment, said Britain took pride in being an open and flexible economy that usually attracted big inflows of investment. "On this occasion we suffered a double blow. We get significant inflows from the United States, which was hit harder and earlier by the downturn and so impacted flows. Also, companies did not want to invest abroad because they were being cautious while the pound was falling," he said.

He also said the government was "disappointed and frustrated" that Britain had fallen back in the world league table in terms of its stock of foreign direct investment (FDI) projects, as opposed to new inflows and outflows. The country fell to second in Europe and from second to third in the world, mainly as a result of the fall in the pound's value against the dollar, in which the figures are compiled.

The trade minister Lord Davies insisted Britain remained open for business: "Despite the tough global conditions, the UK remains a strong and vibrant market, and global businesses recognise this."

Britain suffered a particularly calamitous drop in inflows as last summer wore on, with a first-quarter figure of £46bn dropping to £28bn in the second and a negative figure of £4.5bn in the third quarter, during which Lehman Brothers went bust and capital markets – which are important sources of finance for investment projects – all but closed. The fourth quarter did see a recovery to £28bn.

Britain's inflows from the US are concentrated in financial services, information and communication technology, the creative and media industries, and life sciences. The collapse in foreign investment in the third quarter was almost certainly due to the turmoil in the banking systems of both countries. The sending home of billions of dollars by the UK subsidiary of Lehman Brothers to its US parent would show as a drop in inflows and help explain the negative third-quarter figure.

Shaw said that just as Britain's stock of investment figure had been exaggerated in 2007 by the pound hitting $2, sterling's drop to below $1.40 during the past year had had a depressing effect on the 2008 statistics. If the tables were compiled at today's exchange rate of $1.65, he said, Britain would move up the rankings.

Britain's stock of foreign-owned investment projects tumbled to $983bn last year from a record $1.35tn in 2007. Most other countries saw far smaller falls. The UK drop was also much bigger than the fall in global foreign investment to $1.7tn from $2tn in 2007, although that represented a much bigger drop than Unctad had forecast in its report a year ago.

Its report predicted that world FDI flows would tumble to just $1.2tn this year and only recover modestly to $1.4tn in 2010 and then more robustly to $1.8tn in 2011.

"In 2009 FDI is plummeting across all regions," said Professor Hafiz Mirza, one of the report's authors. "But we are unlikely to go below the 2003 trough [of around $600bn]."

Falls in foreign investment were greater for developed than developing and transition countries such as those in eastern Europe. This means the latter's share of investment rose to 43% last year. While flows to developed countries fell by 29%, to $962bn, they rose to developing countries, by 17% to $621bn.

The US remained the biggest recipient of investment flows, followed by France, China, Britain and Russia.

Investment outflows from developed countries fell by 17% to $1.5tn. The US was also the biggest originator of outflows, followed by France and Japan.

Foreign investment into Africa last year rose to a record $88bn. Unctad expects that to fall this year as a result of the global recession causing businesses to scale back investments. In the first quarter this year, it said, investment into Africa fell 67% compared with last year.

Poor face land grab

Poorer countries are seeing a rise in other countries' buying their agricultural land to satisfy the investing countries' growing need for food, Unctad warned.

The practice, often called "land grabbing", is a growing part of foreign direct investment, which has tripled since 1990 and is increasing more rapidly than ever, Unctad said. Countries such as Cambodia, Malaysia, Tanzania and Mozambique are seeing particularly large agricultural investment inflows as a share of their total inward investments with China, South Africa and Egypt among the investors.

Unctad said agricultural investment by foreign companies could provide much-needed expertise and funding for projects, especially when the world is becoming more concerned about food supply and biofuels production.

But Unctad warned that it could also lead to job losses, restrictive business practices or excessive reliance by local people on the foreign company to buy their produce or supply inputs such as seeds and fertiliser.

Those who can't do, teach. Those who can't teach, teach physical education. Those who can't teach physical education work in financial services.

How have we let our economy rely wholly on people playing roulette with your earnings? Why are we subisdising this fat lazy nation with cheap alcohol and endless vice in order to satisfy this ugly sense of entitlement a lot of us have?

UK PLC slowly rots and fades away under the keen eye of Gordon Brown and his cronies.

Lack of confidence, rampant corruption and light-of-day, legalized theivery are the main factors for the job losses and recession in Britain.

Things will not get better until a complete rout of our financial system has been completed. Don't expect Britain to ever enjoy a top position in the world league table again. We will stay in the game because of our nuclear warfare capability, but our resources are gone, traded for frivilous ego-stroking pleasures, never saving for the rainy day ahead. End of Empire hurts.

House prices....meh. Taxes, spending cuts, loss of our way of life. These are far more important.

Just hope that you aren't forced into rationing, bread lines, or worse. Are you ready to deal with the crime wave ahead?

How longer can they conceal the truth of our dire predicament with this state sponsored smoke screen/facade?

Edited by cashinmattress

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"If this country cannot be run properly by you (Parliament) then I will have to run it alone (sic)"

O. Cromwell

We have endemic corruption from HM Government down to the barrow boys that work for the "banks." The "bonuses" are back while there is still taxpayers money to rob and Brown tries to keep the water behind the dyke by putting his, er, finger in the ever widening hole in the wall.

It will all be over before Christmas. The only thing is, what will take "its" place?

Viva la....................... :o

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"If this country cannot be run properly by you (Parliament) then I will have to run it alone (sic)"

O. Cromwell

We have endemic corruption from HM Government down to the barrow boys that work for the "banks." The "bonuses" are back while there is still taxpayers money to rob and Brown tries to keep the water behind the dyke by putting his, er, finger in the ever widening hole in the wall.

It will all be over before Christmas. The only thing is, what will take "its" place?

Viva la....................... :o

Seriously though RB, what can you lot do about it?

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Guest Parry aka GOD
Foreign investment in UK falls by half

Those who can't do, teach. Those who can't teach, teach physical education. Those who can't teach physical education work in financial services.

How have we let our economy rely wholly on people playing roulette with your earnings? Why are we subisdising this fat lazy nation with cheap alcohol and endless vice in order to satisfy this ugly sense of entitlement a lot of us have?

UK PLC slowly rots and fades away under the keen eye of Gordon Brown and his cronies.

Lack of confidence, rampant corruption and light-of-day, legalized theivery are the main factors for the job losses and recession in Britain.

Things will not get better until a complete rout of our financial system has been completed. Don't expect Britain to ever enjoy a top position in the world league table again. We will stay in the game because of our nuclear warfare capability, but our resources are gone, traded for frivilous ego-stroking pleasures, never saving for the rainy day ahead. End of Empire hurts.

House prices....meh. Taxes, spending cuts, loss of our way of life. These are far more important.

Just hope that you aren't forced into rationing, bread lines, or worse. Are you ready to deal with the crime wave ahead?

How longer can they conceal the truth of our dire predicament with this state sponsored smoke screen/facade?

Damn good post, that's how I see it. House prices? We're (well you lot anyway) well beyond house prices.

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Foreign investment in UK falls by half

Those who can't do, teach. Those who can't teach, teach physical education. Those who can't teach physical education work in financial services.

How have we let our economy rely wholly on people playing roulette with your earnings? Why are we subisdising this fat lazy nation with cheap alcohol and endless vice in order to satisfy this ugly sense of entitlement a lot of us have?

UK PLC slowly rots and fades away under the keen eye of Gordon Brown and his cronies.

Lack of confidence, rampant corruption and light-of-day, legalized theivery are the main factors for the job losses and recession in Britain.

Things will not get better until a complete rout of our financial system has been completed. Don't expect Britain to ever enjoy a top position in the world league table again. We will stay in the game because of our nuclear warfare capability, but our resources are gone, traded for frivilous ego-stroking pleasures, never saving for the rainy day ahead. End of Empire hurts.

House prices....meh. Taxes, spending cuts, loss of our way of life. These are far more important.

Just hope that you aren't forced into rationing, bread lines, or worse. Are you ready to deal with the crime wave ahead?

How longer can they conceal the truth of our dire predicament with this state sponsored smoke screen/facade?

what a great post cashinmatress. :):)

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Guest Parry aka GOD
Seriously though RB, what can you lot do about it?

They could, if the Tory party have the balls (not Ed Balls, thankfully) put a 20 year plan together and start building some power stations, sort the grid out, secure water supplies (south east England is a hot spot for drought), sort out public transport so it's at least as good as it is here, loads to do . . . loads and loads to do . . .

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They could, if the Tory party have the balls (not Ed Balls, thankfully) put a 20 year plan together and start building some power stations, sort the grid out, secure water supplies (south east England is a hot spot for drought), sort out public transport so it's at least as good as it is here, loads to do . . . loads and loads to do . . .

hooverdamesque

iirc, you need a war though before you can upgrade the infrastructure. :ph34r:

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They could, if the Tory party have the balls (not Ed Balls, thankfully) put a 20 year plan together and start building some power stations, sort the grid out, secure water supplies (south east England is a hot spot for drought), sort out public transport so it's at least as good as it is here, loads to do . . . loads and loads to do . . .

Please don't advocate more public spending. Please, please, please................

p-o-p

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Guest Parry aka GOD

hooverdamesque

iirc, you need a war though before you can upgrade the infrastructure. :ph34r:

The UK still lives off the back of Ismbard. No need for war. Just get the engineers and the plant operators and the concrete plants and the steel fixers back to work. Funnel the money through the nationalised banks so they appear solvent, they lend to these projects, gets everyone back to work, they pay their bills/mortgages and guess what . . . yes the UK is competitive again because it has fabulous infrastructure thus able to pay down debt with direct foreign investment attracted by said infrastructure.

How else?

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They could, if the Tory party have the balls (not Ed Balls, thankfully) put a 20 year plan together and start building some power stations, sort the grid out, secure water supplies (south east England is a hot spot for drought), sort out public transport so it's at least as good as it is here, loads to do . . . loads and loads to do . . .

I don't really give a stuff about the economy or house prices, but I do care about the contempt which this government has for the people of this country and the corruption they reside over. This is where the real changes need to begin.

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"End of Empire hurts."

That's an interesting point. Most historians would suggest that the British Empire ended after WW1, or possibly as late as WW2.

Actually the empire still exists, but it is a financial empire; the anglo-banking empire. It gained a lifeline via the Federal Reserve System in the USA (which has links to the UK and is based upon the UK system), which morphed into the Anglo-American financial empire. Thus the 'British Empire of Money' has lived on and actually gained in power and influence up to recent years, and this is coming to an end now.

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Guest Parry aka GOD
I don't really give a stuff about the economy or house prices, but I do care about the contempt which this government has for the people of this country and the corruption they reside over. This is where the real changes need to begin.

I used to, but now I don't give a stuff.

Would be nice to see the UK be the country that it could be, rather than the country it is sadly becoming.

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The UK still lives off the back of Ismbard. No need for war. Just get the engineers and the plant operators and the concrete plants and the steel fixers back to work. Funnel the money through the nationalised banks so they appear solvent, they lend to these projects, gets everyone back to work, they pay their bills/mortgages and guess what . . . yes the UK is competitive again because it has fabulous infrastructure thus able to pay down debt with direct foreign investment attracted by said infrastructure.

How else?

Or we get another real esatate boom on the back of the infrastructure value and further indebt our population with houses

Our deep systemic problem is we have set up our tax system so that whenever we get growth we cripple each other with housing costs

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Guest Parry aka GOD
Or we get another real esatate boom on the back of the infrastructure value and further indebt our population with houses

Our deep systemic problem is we have set up our tax system so that whenever we get growth we cripple each other with housing costs

That's easy to fix. You need to speak with a Mr. Eric Pebble regards preventing this. Also speak with Mr. F. Harrison.

Such controllable stuff should not impede real progress. You need electric. or you need more caves and more candles driving the price of caves and candles to ludicrous levels.

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