Britain's post Brexit resilience seems to be fading. A new survey from Ernst & Young LLP released last week reveals that the country has fallen below the first five slots on the list of the top locations for doing business. For the first time in seven years, Britain finds itself ranked below the likes of China, Germany, Canada and France.
The U.S. heads the list, but at a time when domestic markets seem slightly troubled, it may be a good idea to look at options overseas. Adding stocks from other countries ranked higher on this list may be a smarter move now.
Britain's Business Attractiveness Fades
Ernst & Young's Global Capital Confidence Barometer has surveyed 1,700 executives across 45 counties. According to the report, the top five investment destinations for mergers, acquisitions and deals activities are the U.S., Germany, Canada and France. Britain features lower on the list, at number seven, primarily due to the impact of the surprise Brexit vote.
According to E&Y, Brexit has caused several geopolitical changes which have made cross border investments even more complex. Additionally, the volatile nature of exchange rates has also dulled the enthusiasm for deal making. Since the vote took place in June, the pound has lost nearly a fifth of its value versus the dollar.
Meanwhile, economic forecasting group EY Item Club has said that Britain's resilience post Brexit was largely "deceptive". According to the group, inflation will rise to 2.6% next year, causing consumer spending to decline from the projected 2.5% this year to 0.5% in 2017. Meanwhile, doubts over Britain's economic ties with the EU after Brexit will result in a drop in confidence among companies, bringing down business investment.
China, Canada, France Emerge as Better Options
It's not that the economies of China, Canada and France are in the pink of health. But they seem to be dealing with their problems more...