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The UK will forever damage its appeal to American investors if its government continues to maintain its tax and regulatory burden on its operations, warns the head of the leading transatlantic trade association.
Britishamerican Business CEO Duncan Edwards said after the UK’s annual survey showed a “sustainable slide” on the trust of U.S. companies in the UK over the past five years, the UK needs to be “very careful” to avoid wasting US investors and their privileged positions.
“The UK needs to be very careful not to take the obvious, very advantageous position,” Edwards told the Financial Times. “There’s a risk that international companies will reach a turning point where they say, ‘Wait, is the UK really the place to go?’ ”
His warning comes after an increase in payroll taxes by £25 billion has worsened relations between workers and businesses as British Prime Minister Rachel Reeves is widely expected to raise taxes in her second budget on November 26th.
A study by BAB business executives on both sides of the Atlantic Ocean captures the temperature of transatlantic relations.
This showed confidence that the UK has dropped to 6.3 out of 10 this year, down from 7.8 in 2021.
“The sustainable slides show that more work is needed to inspire the UK’s confidence and drive economic growth,” the survey warned.
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A survey on Monday found that UK business confidence in the UK was hit “significant” in the year Donald Trump was elected for his second White House term.
British executives have raised concerns about Trump undermining the rule of law and have picked out the president’s volatile trade policy as a drain on British investors’ trust in the United States.
The report, compiled by management consultancy Bain & Co, examines 75 UK and American companies operating in almost every region of each other’s market, combining a total of 300,000 workers.
Before elections in the UK and US in June and November last year, businesses were “cautiously optimistic” that after the weathering of Covid-19, both economies had entered a “stable period” after inflation shocks from Brexit and fallout, the report said.
However, sentiment on both sides of the Atlantic declined following Trump’s reelection, and the rapid deterioration of the priorities relationship behind the UK PLC and a series of major early tax increases.
Overall confidence in the corridors of the transatlantic trade skated to 6.6 out of 10 after five years hovering between 7.2 and 7.
“Business likes stability, but what we’ve experienced on both sides of the Atlantic is the opposite,” he said. “It remains one of the most vibrant investment corridors in the world, but confidence, while still high in absolute terms, is definitely on both sides, and that’s a concern.”
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While British companies continued to express their trust in the US capital markets and the country’s labor force, views on the rule of law became negative after the year Trump launched a series of attacks on law firms, universities, scientific research and the Federal Reserve.
The “Pure Charm” of the Rule of Law in the United States – The share of survey respondents cited subtracting attractive attributes from attractive attributes declined significantly above a plus seven last year, except for those who thought it was unattractive.
Asked about their confidence in the US approach to domestic and global economic policy, British leaders gave an average of 5.4 out of 10, with almost three-quarters of respondents returning scores of 6 or less.
In priorities, the net appeal of the UK political environment rose sharply from minus 16 to plus 37. However, for tax purposes, the UK’s appeal has dropped from a already low of minus 23 last year to minus 36.
“This likely reflects concerns about certain tax concerns, including the UK’s future financial position and recent increases in employer national insurance contributions,” the BAB report found.
The Ministry of Business and Trade noted that the UK was the first country to sign a mutual tariff trade agreement with Trump last May, and that the total value of US and UK investments in mutual countries exceeded £120 million.
“The US trade agreement will continue to make it easier for businesses on both sides of the Atlantic to trade and invest,” he added.
Data visualization by Amy Bollett
