Some of the world’s biggest businesses have committed to invest a total of nearly £30 billion in Britain, the government announced recently ahead of a major investment summit. World-leading investors are set to plough tens of billions into projects up and down the UK in the country’s tech, life sciences and renewable energy sectors, creating over 12,000 new jobs.
It came as over 200 A-list chief executives and investors gathered in London’s Hampton Court Palace for the Global Investment Summit. Prime Minister Rishi Sunak said this planned investment represented “a huge vote of confidence in the future of the UK economy.”
Sunak said: “Global CEO’s are right to back Britain – we are making this the best place in the world to invest and do business.” He added: “From giving businesses the biggest tax cut in history, to our culture of innovation and thriving universities producing some of the finest minds in the world, ours is truly a nation of opportunity.”
Major investments secured include £10 billion from Australia’s IFM investors on energy and infrastructure schemes and £7bn from Spain’s Iberdrola, which will focus on the UK’s electricity networks. Microsoft has also pledged £2.5 billion to build crucial artificial intelligence (AI) infrastructure, which will bring more next-generation AI data centres and thousands of graphic processing units to the UK.
Switzerland’s Partners Group, Germany’s BioNTech, the US based Ellison Institute, and the Netherlands’ Yondr are all also planning to invest between £1 billion to £2.5 billion in the UK, the government said. David Neal, IFM CEO said: “Our presence in the UK continues to grow and we look forward to working closely with the government to drive investment into large-scale infrastructure and energy transition projects across equity and debt funding.”
The capital pledged is triple the amount secured at the last Global Investment Summit in 2021, the government said. It added that the department for Business & Trade is also exploring options for a UK corporate re-domiciliation regime to make it easier for foreign companies to relocate to the UK in a bid to spur further investment.
Notable business chiefs interested in attending included Stephen Schwarzman from Blackstone, Amanda Blanc from Aviva, David Soloman from Goldman Sachs and Jamie Dimon at JP Morgan. Chase Barclays, HSBC and Lloyds Bank are principal partners of the event.
The Bank of England is likely to give the UK economy a “modest” upgrade following the impact of the autumn statement, a leading analyst predicted. In the fiscal event last month, Chancellor Jeremy Hunt unveiled a fiscal loosening worth £18bn, the majority of which came from tax cuts.
In a surprise move, Hunt cut the rate of national insurance by two percentage points and also made the full expensing of capital investment permanent. Sanjay Raja, chief UK economist at Deutsche Bank, said the MPC will see a “meaningful upgrade to their government spending assumptions, especially in 2024”.
“This will result in a modest upgrade to the Bank’s growth projections (particularly for 2024), all things equal,” he added.
The Bank predicts almost zero growth over the next two years, while, despite hefty downgrades, the Office for Budget Responsibility (OBR) expects the UK to grow 0.7 per cent in 2024 before picking up to 1.4 per cent in 2025. Focusing specifically on the measures announced by Hunt last month, the fiscal watchdog forecast a “modest boost” to output of 0.3 per cent in five years time.
Richard Hughes, chair of the OBR, said: “Although 0.3 per cent doesn’t sound very much it is one of the biggest growth upgrades we have ever done for policy in our forecasts.” Raja said the Statement had “raised the bar for HI-24 rate cuts” while analysts at Capital Economics expected the government’s fiscal policy to push the first rate cut back even further. (The writer is our foreign correspondent based in the UK)
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