Rachel Reeves’ Speech: A Positive Outlook for Foreign Direct Investment

Rachel Reeves speech that outlined key initiatives and proposals for the UK economy could mark an important milestone in bolstering foreign direct investment (FDI) in the UK. As the Head of International at Irwin Mitchell, these could prove to be forward-thinking measures to seek to enhance the UK’s attractiveness as a prime destination for global investors.

Reeves’ speech comes at a pivotal moment, coinciding with the recent findings of PwC’s annual survey of global business leaders. The survey, published at the start of the World Economic Forum (WEF) in Davos, reveals that the UK has climbed to the second most attractive country for investment, trailing only the United States. This marks a significant rise from fourth place in 2024, positioning the UK ahead of major economies such as China, Germany, and India.

The PwC survey, which gathered insights from nearly 5,000 chief executives across 109 countries, highlights the UK’s highest ranking in its 28-year history. This achievement underscores the resilience and potential of the UK economy, despite recent economic challenges and a lukewarm reception to some of the measures so far put forward by the new UK government.

Rachel Reeves’ proposals are timely and align well with the positive sentiment reflected in the PwC report. Her focus on creating a stable and conducive environment for FDI, coupled with strategic initiatives to support innovation and infrastructure development, and are meant to reinforce the UK’s position as a leading investment hub.

Among the key initiatives is the development of a ‘Silicon Valley’ between Oxford and Cambridge aims to create a high-tech innovation corridor, attracting tech companies and startups from around the world.

The construction of nine new reservoirs will ensure a reliable water supply, crucial for industrial and agricultural investments. Furthermore, changing infrastructure rules to support projects outside the South East will promote balanced regional development, making various parts of the UK attractive for investment.

The redevelopment of Old Trafford ground in Manchester, with the potential to create 5,000 new homes, is another noteworthy project. Large-scale urban redevelopment projects can attract foreign real estate investors and improve the local economy.

Trade trips to strengthen relations with India, the USA, and the EU are also on the agenda. These trips will help build stronger trade relationships, opening up new markets and investment opportunities for UK businesses and attracting foreign investors.

Lastly, the National Wealth Fund’s investments in green energy projects, including more EV charging points and support for Cornish Metals Ltd, will attract environmentally conscious investors and companies looking to invest in sustainable projects.

In conclusion, Rachel Reeves’ speech and the PwC report collectively paint a promising picture for the future of FDI in the UK, provided the measures are taken forward in a sensible and timely manner, and do not encounter significant opposition. 

Irwin Mitchell has published its latest FDI report this week. The in-depth study includes an introduction from Baroness Gustafsson, insights on the UK’s advanced manufacturing sector by Simon Collingwood, a case study on Freeports by Calum Macpherson, and expertise from legal professionals on how FDI projects can create jobs and drive innovation.