US trade deal makes Britain top investment destination in the world

Telegraph

07-07-2025

Britain has become the most attractive place to invest in the world after Sir Keir Starmer struck a trade deal with Donald Trump.
A survey of the finance chiefs of some of Britain's biggest listed businesses found that the UK was now their preferred country to invest in, overtaking the US, Japan and the Middle East. The UK has leapt up the rankings since the end of last year, when it came in at sixth spot.
Deloitte, which conducted the survey, said the boost was 'in the light of the UK-US trade deal announced in early May.' Conflict in the Middle East has also weakened that region's relative appeal as a destination for investment.
Ian Stewart, chief economist at Deloitte UK, said: 'Despite conflict in the Middle East and volatility in oil prices, levels of concern about geopolitical risk fell slightly in the second quarter. This may reflect an easing of concerns around trade in the light of the UK-US trade deal announced in early May.'
It comes as the world braces for the return of US tariffs on trading partners when a 90-day pause on Mr Trump's 'liberation day' levies expires this Wednesday. The president said be would notifying about a dozen countries on Monday of the new tariff level on their shipments to the US.
Treasury secretary Scott Bessent said on Sunday that the new tariffs would take effect from August 1. He said several trade deals were close to completion.
'We're going to be very busy over the next 72 hours, ' Mr Bessent said Sunday on CNN's State of the Union.
'If you don't move things along, then on Aug 1, you will boomerang back to your April 2 tariff level.'
In the latest Deloitte survey, a net 13pc of UK finance chiefs described Britain as very or somewhat attractive for investment. Only India ranked as highly, with the two countries sharing the top position. Meanwhile, more finance bosses said they were open to expanding, with 17pc saying now was a good time to take risks.
The survey covered finance chiefs for both public and private businesses, including FTSE 100 companies. While they are UK-based, a majority of the companies surveyed have international operations.
Richard Houston, chief executive of Deloitte UK, said: 'This renewed confidence, coupled with a rise in risk appetite, is welcome and underscores the considerable investment potential the UK offers.'
Britain was the first country to secure a trade pact with the US in May. Mr Trump at the time hailed the UK as 'truly one of our great allies' and said it was a 'great honour' to have Britain sign the first deal with the United States.
Under the terms of the agreement, the Prime Minister secured lower tariffs on UK car imports into the US, while the aerospace sector was shielded from levies.
The Government called it a 'landmark' deal that would save thousands of jobs and make it easier for British companies to do business across the Atlantic.
The findings will be a welcome boost for the Government, which has been battling to convince companies to invest in Britain.
Last year, foreign investment into Britain plunged to a record low. Official figures showed the number of inbound foreign direct investment (FDI) projects dropped to 1,375 last year, down 12pc from the 1,555 in 2023-24.
Deloitte's positive findings also come after a torrid week for Labour that has seen Sir Keir's authority significantly weakened by a rebellion on cuts to welfare spending.
Ms Reeves said: 'Finance leaders see the UK as the best place in the world to invest. Under this Government we are open for business, delivering more investment, more jobs and putting more money in people's pockets across Britain.'