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The Independent
an hour ago
- Business
- The Independent
There is one statistic that should worry Reeves and Starmer the most
If there is one statistic that should ring alarm bells in government it is this: that the number of foreign direct investment (FDI) projects in the UK has fallen to the lowest level since records began 18 years ago. It isn't the Tories or a Tory-backed think tank saying this but the government's own people, the Department for Business and Trade. There were 1,375 FDI projects secured by the UK to the end of March, down 12 per cent from the previous year and the lowest since the data began to be compiled in 2007-08. Why does this matter? Because investment from overseas brings with it jobs and prosperity. It's a declaration of faith that Britain is a good place in which to do business and by choosing to come here, foreign businesses are preferring this country over others. Britain needs that international money, it cannot rely on homegrown capital to drive wealth. But increasingly, it's not coming. Investors, it seems, do not like what they see and would rather go elsewhere. The phenomenon is not new – the peak, of 2,265 ventures, was in 2016-17 – but it gives the lie to Sir Keir Starmer 's much vaunted growth agenda. We're told that the prime minister and his chancellor, Rachel Reeves, are going further and faster to kickstart the economy. A year into their rule, a period that more or less coincides with the official DBT update on FDI, foreigners are telling us something very different. There is of course, more than one way to skin a cat, and a DBT spokesperson duly insists: 'This government knows the power of inward investment and is laser-focused on targeting the highest-impact job-creating wins across the UK, which is why the value of our FDI projects has gone up over the past year as we seek quality over volume.' Note the 'laser-focused', which sounds impressive but is meaningless. It's insulting and, by the way, wouldn't previous administrations also declare they were similarly 'laser-focused'? Then again, it's a bit like 'further and faster', a description to be repeated ad nauseam but which does not amount to anything. Note, too, the shift from quantity to quality. These were figures devoted to quantity, as they have been for almost two decades. But now, they are rendered redundant. Would they have said the same if the total had risen? What do you think? The point about concentrating on the size of a deal rather than its existence is that value is hard to quantify. It depends on how companies formulate their accounts, exchange rate movements and other factors. Crucially as well, that size tally can be skewed by just one deal, one mega-merger between multinationals that may even result in substantial UK job losses. Another, accompanying, piece of data is that the government estimates that jobs created via FDI were down 3 per cent in the year to end of March 2025. It was said to be an estimate but the number was precise, at 69,355, which is the lowest since 2020-21, when Britain, and the world, was in the grip of Covid-19. It is true that Britain is not alone. Other large nations, especially those in Europe and including the US, suffered falls in their inward investment. The recent EY attractiveness survey put the blame on 'weak economic growth, geopolitical turbulence and ongoing high energy prices'. That may be so, but how to explain then the fact that FDI in the UAE increased by 49 per cent last year? This was in the World Investment Report from the United Nations Conference on Trade and Development. Being the UN, however, the popularity of the rich UAE was a cause for regret. 'Too many economies are being left behind… because the system still sends capital where it's easiest, not where it's needed,' said UNCTAD's secretary-general. Yes, capitalism is unfair. Unlike many nations, though, Britain is in a position to make life easier for investors. What is the government doing? Only increasing employers' national insurance contributions and adding to the regulatory burden, and therefore the cost, with its new workers' charter. Not much sign of 'further and faster' there. Comparing the UK's performance with others and saying they were down as well, is rather like those organisations that when they suffer a disaster fall back on the reality that most of the time everything operates fine. No, it's this calamity that counts and its consequences, that is all that people are concerned with. It's a convenient get-out tactic that encourages acceptance and complacency rather than action. But they are laser-focused so that's alright then. What is concerning is where those falls in FDI projects occurred, in IT and financial services, in life sciences, biotech and pharmaceuticals, just the sectors the government is keen to promote as epitomising Britain's modern economy. There is a trend underway that, if reports are to be believed, has seen Reeves react. This is outflow of individuals' wealth from Britain. Some non-doms, the wealthy foreigners able to take advantage of lower tax rules, have chosen to depart. Meanwhile, others are not coming. Why? Because in her Budget, the chancellor said she was planning to make them subject to UK inheritance tax on their worldwide assets, including those held in trusts – a proposal she is now said to be reconsidering. Whether it's enough remains to be seen. Hers is a regime that has targeted the wealthy in other areas. That she decided to strike at the non-doms may be seen as indicative of a wider policy. Reeves made her move at exactly the same moment as other nations were doing their level best to woo the fleet-of-foot global rich, offering an array of inducements and benefits. They were doing so because while these folks pay lower taxes they contribute to the public purse through other means, by spending and investing – like FDI in other words. Perish the thought the two are related, that foreigners per se no longer wish to invest in Britain. That laser focus, it seems, has yet to reach them.
Times of Oman
12 hours ago
- Business
- Times of Oman
India records $13.5 billion current account surplus in Q4-FY25
Mumbai: India's current account recorded a surplus of $13.5 billion (or 1.3 per cent of GDP) in the January-March quarter of 2024-25 as compared with $4.6 billion (or 0.5 per cent of GDP) in the same quarter of 2023-24, RBI data showed Friday. Reportedly, the country's current account posted a surplus for the first time in four quarters. In the October-December quarter of 2024-25, the current account was in a deficit of USD 11.3 billion (1.1 per cent of GDP). Merchandise trade deficit, at USD 59.5 billion in Q4 2024-25, was higher than USD 52.0 billion in Q4 2023-24. However, it moderated from USD 79.3 billion in Q3 2024-25. Net services receipts increased to USD 53.3 billion in Q4 2024-25 from USD 42.7 billion a year ago. Services exports have risen on a year-on-year basis in major categories such as business services and computer services. Net outgo on the primary income account, primarily reflecting payments of investment income, moderated to USD 11.9 billion in Q4 2024-25 from USD 14.8 billion in Q4 2023-24. Personal transfer receipts, mainly representing remittances by Indians employed overseas, rose to USD 33.9 billion in Q4 2024-25 from USD 31.3 billion in Q4 2023-24. In the financial account, foreign direct investment (FDI) recorded a net inflow of USD 0.4 billion in Q4 2024-25 as compared to an inflow of USD 2.3 billion in the corresponding period of 2023-24. Foreign portfolio investment (FPI) recorded a net outflow of USD 5.9 billion in Q4 2024-25 as against a net inflow of USD 11.4 billion in Q4 2023-24. In the entire year 2024-25, India's current account deficit, at USD 23.3 billion (0.6 per cent of GDP) was lower than USD 26.0 billion (0.7 per cent of GDP) during 2023- 24, primarily due to "higher net invisibles receipts." Net invisibles receipts were higher during 2024-25 than a year ago on account of services and personal transfers, RBI said. Aditi Nayar, Chief Economist and Head - Research and Outreach, ICRA Limited, said, "While the current account balance expectedly reported a seasonal surplus in Q4 FY2025, the size of the same overshot our expectations, amid a surprise dip in primary income outflows in the quarter. This led to the unexpected narrowing in the CAD to 0.6 per cent of GDP in FY2025 from 0.7 per cent in FY2024." "Amid expectations of a widening in the merchandise trade deficit as well as a moderation in the services trade surplus in Q1 FY2026 vis-a-vis Q4 FY2025, we expect the current account to revert to a deficit in the ongoing quarter, printing at 1.3 per cent of GDP. We foresee India's current account deficit to average 1 per cent of GDP in FY2026, assuming an average crude oil price of USD 70/barrel for the fiscal, which is eminently manageable in spite of the prevailing global uncertainties," added Nayar. In another news, the Reserve Bank of India, in consultation with the State Governments/Union Territories (UTs), announced today that the quantum of total market borrowings by the State Governments/UTs for the quarter July - September 2025, is pegged to be Rs 2.86 lakh crore.
Times
19 hours ago
- Business
- Times
Foreign investment in UK falls 11% to record low
The number of foreign investment projects into the UK fell by more than 11 per cent to a record low in 2024. According to the Department for Business and Trade, there were 1,375 inbound foreign direct investment (FDI) projects into the UK in 2024, an 11.6 per cent fall from 2023 and the lowest number since 2007, when the government started recording the figure. The number of jobs created in the UK through FDI fell by 3 per cent to 69,355 and the number of existing jobs safeguarded through FDI decreased by 12 per cent to 10,195. The Labour government has attempted to present the UK as a prime location for foreign investment over the past year with mixed success. Its international investment conference in October was overshadowed by a row with DP World, the owner of P&O Ferries. Louise Haigh, the transport secretary, called for a boycott of P&O Ferries and described it as a 'rogue operator' weeks before DP World had been due to announce a £1 billion investment into its London Gateway container port. Haigh's comments put the investment in jeopardy and DP World was said to have considered reviewing it and postponing its announcement, although it did ultimately go ahead. Rachel Reeves, the chancellor, and Jonathan Reynolds, the business secretary, have also sought to court foreign investment on trips to China and the Gulf states, respectively. The proportion of inbound FDI projects in the UK that were supported by the business department also fell from 65 per cent in 2023 to 61 per cent in 2024. The total economic impact of the supported projects was estimated to be roughly £6 billion. At the same time the number of FDI projects considered to be new investment projects fell by 20 per cent, from 1,023 in 2023 to 815. The number of projects considered to be either expansion projects or mergers and acquisitions increased by 4 per cent and 7 per cent, respectively. The United States accounted for 329 FDI projects in 2024, more than any other country, followed by India, which was responsible for 106 projects, and Germany, which accounted for 83 projects. The software and computer services sector had the most FDI projects with 257, followed by financial services and then advanced engineering.
STV News
20 hours ago
- Business
- STV News
Edinburgh economy outperforms London for first time, new data reveals
Edinburgh's economy has outperformed London's for the first time ever, according to new data. The Office for National Statistics (ONS) revealed that the value of goods and services produced per head of population surpassed London's for the first time. The figures showed a gross domestic product per capita of £69,809 in Edinburgh, compared to £69,077 for London. City of Edinburgh council leader Jane Meagher welcomed the news, saying the capital has long been Scotland's 'economic powerhouse'. 'This is good news for our local businesses and employment, and shows the confidence global investors have in Edinburgh,' she said. Over the last year, the city has welcomed 27 developments funded by foreign direct investment (FDI), with shops like Sostrene Grene and MINISO to renewable energy consultants PSC. Meagher added: 'We know that Edinburgh is one of the best places to live, work and study, making it a magnet for such investment and for tourism.' 'This is the fastest growing city in Scotland, with more than 60,000 new residents expected over the next 20 years and over four million visitors every year.' Meagher said the city now faces the challenge of ensuring the growth is 'fair and sustainable'. 'To keep thriving, we need to manage the pressures placed on our housing, transport network, environment, services and residents,' she continued. 'Everyone should be able to benefit from Edinburgh's continued economic success.' Get all the latest news from around the country Follow STV News Scan the QR code on your mobile device for all the latest news from around the country
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Business Standard
a day ago
- Business
- Business Standard
India must protect farmers, digital ecosystem in trade pact with US: GTRI
Any trade agreement with the US must not be politically driven or one-sided and India should protect its farmers, digital ecosystem, and policy space, economic think tank GTRI said on Friday. With India's chief trade negotiator in Washington DC and the clock ticking, the next few days could determine whether India and the US settle for a limited mini-deal or walk away from the negotiating table - at least for now, the Global Trade Research Initiative (GTRI) said. The two sides are looking at finalising an interim trade pact before July 9, as it marks the end of US President Donald Trump's 90-day suspension of the country-specific tariffs, originally announced on April 2. "The more likely outcome is a limited trade pact - styled after the US-UK mini trade deal announced on May 8," GTRI Founder Ajay Srivastava said, adding, "any trade deal with the US must not be politically driven or one-sided, it must protect our farmers, our digital ecosystem, and our sovereign regulatory space." Under a mini or interim deal, according to the think tank, India is expected to cut tariffs on a wide range of industrial goods, including automobiles, a persistent demand from Washington. In agriculture, India may offer limited market access through tariff reductions and tariff-rate quotas (TRQs) on select US products such as ethanol, almonds, walnuts, apples, raisins, avocados, olive oil, spirits, and wine, it added. Beyond tariffs, the US is expected to press India for large-scale commercial purchases, including oil and LNG, civilian and military aircraft from Boeing, helicopters, and nuclear reactors, it said. "There may also be pressure on India to ease FDI restrictions in multi-brand retail, potentially benefiting firms like Amazon and Walmart and to liberalise rules on remanufactured goods, currently subject to stringent import norms," Srivastava said. Agricultural goods account for less than 5 per cent of US exports to India. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
