Boss of US giant: UK’s STILL great for trade
ONE of Britain’s biggest overseas investors has dismissed Treasury warnings that foreign companies will shun the UK when it leaves the European Union.
In a coup for Brexit supporters, the UK boss of American manufacturer General Electric said Britain remains attractive for investors despite the uncertainty created by the referendum result.
Mark Elborne’s comments came as a credit rating agency said yesterday that dire warnings of ‘Armageddon’ after Brexit were overdone and the UK will avoid a full-blown recession.
In the run-up to the EU referendum opponents of leaving the EU predicted that Britain faced recession and economic meltdown if the country voted to leave.
‘Escape recession’
But now Standard & Poor’s has said it does not foresee this scenario – and forecast that the UK would ‘ escape a fullfledged recession’.
Jean-Michel Six, the rating agency’s chief economist for Europe, told The Daily Telegraph: ‘We’re not in the Armageddon camp. Devaluation acts as a shock absorber. It stimulates exports and makes the London Stock Exchange more attractive to foreign investors.’
The pound has fallen more than 10 per cent against the dollar since the Brexit vote. But Standard & Poor’s said the weak pound was likely to ‘boost exports over the next two years’. It predicts Brexit will cause a 1.2 percentage point drag on economic growth this year and a 1 point hit in 2018. That takes its growth forecast for 2016 to 1.5 per cent, for 2017 to 0.9 per cent, and for 2018 to 1 per cent.
General Electric, which makes a wide range of components including turbines for power stations and jet engines, has spent £14billion buying British businesses over the past 12 years. It employs 22,000 staff in Britain.
Mr Elborne, praising the UK’s ‘strong export mindset’ and attrac- tive domestic market, described Britain as ‘a good place to do business’ and ‘a good place to run a business from’.
He also said the fall in sterling since the referendum vote would boost exporters as it would make their goods more competitive.
The intervention came as Chancellor George Osborne revealed plans to slash corporation tax to 15 per cent as part of a charm offensive to woo big business.
The vote of confidence from General Electric was welcomed last night by Eurosceptics, with Ukip MP Douglas Carswell describing it as further evidence Britain remains ‘open for business’.
Peter Hargreaves, the billionaire co-founder of investment firm Hargreaves Lansdown – who helped bankroll the Leave campaign – said it exposed the ‘scaremongering’ of Europhiles who warned that Brexit would have a devastating impact on trade and foreign investment.
Leave campaigners have been encouraged by reports that countries including Australia, New Zea- land, South Korea and India are lining up to enter trade talks with Britain in the wake of the decision to leave the EU.
Despite a warning from President Barack Obama that the UK would be ‘at the back of the queue’ for any trade deal if it left the EU, there is already growing pressure from other American politicians to strike an agreement.
A number of firms which supported the Remain campaign – including HSBC and Barclays – have also signalled their commitment to Britain since the vote on June 23.
In an interview with The Times, Mr Elborne became the latest business leader to give the UK his backing, despite being among almost 200 signatories of a letter supporting Britain’s continued membership of the EU.
A series of business heavyweights – including vacuum cleaner entrepreneur Sir James Dyson and JCB boss Lord Bamford – have rejected predictions that Brexit will lead to a slump in trade.