Policy analysis from the Centre for Economic Performance
CEP BREXIT Analysis
The impact of Brexit on foreign investment in the UK
Swati Dhingra, Gianmarco Ottaviano, Thomas Sampson and John Van Reenen
Paper No' CEPBREXIT03:
| Technical Paper
The third in a series of Brexit reports from the Centre for Economic Performance (CEP), examines how leaving the EU would affect UK incomes through changes in foreign investment in the UK. Leaving the European Union (EU) would reduce flows of foreign direct investment (FDI) into the UK by more than a fifth, damaging productivity and lowering people’s incomes. Cars and financial services – two important UK industries – would receive less investment from foreign firms that use the UK as a base to access EU markets. And the UK’s ability to negotiate concessions from regulations on EU-related transactions would be seriously eroded. Overall, incomes could fall by about 3.4% just from lower foreign investment.