UK the biggest foreign investor in US with £449bn, says CBI

Its seems like the special relationship is paying off as the UK is the largest single investor in the US and supports over 1m jobs across the country, according to a business organisation.

Over 70 years since prime minister Winston Churchill coined the phrase, the economic relationship between the two nations has grown. By the end of 2014, the UK had invested $449bn in the US according to the report by the Confederation of British Industry. This is greater than Japan in second place with $76bn and $200bn more than Canada.

The $449bn investment represents about a 15% share of the $2.9trn of direct foreign investment in the US, greater than Indian and Chinese investment combined to about 1%.

British companies employed over 1m people in the US. Nearly a quarter worked in the manufacturing industry, in which Britain invested about $180bn in 2014.

US exports to the UK was $123bn in 2015, which made Britain the fourth largest destination for US exports for a second year running, and the largest within the EU.

American services exports to the UK rose to $66.9bn in 2015 up from $63.2bn in 2014, while US imports of British services increased to $53bn from $50bn in 2014.

CBI international director Ben Digby, said that due to the Brexit result from the European Union referendum and the presidential election in the US, “we need to everything we can to make it easier trade, invest and drive prosperity”.

Digby said: “As the government negotiates our exit from the EU, a clear strategy will be needed to boost trade with partners, old and new, across the globe. Markets should be carefully prioritised, in consultation with business, to lay the foundations for deep and comprehensive future trade and investment relationships, and the USA must be at the top of that list.”

However this remains to be seen as before the referendum president Barack Obama said on state visit in April, the UK would be at the “back of the queue” in any trade deal with the US if the country voted for Brexit.

“I think it’s fair to say that maybe some point down the line there might be a UK-US trade agreement, but it’s not going to happen any time soon because our focus is in negotiating with a big bloc, the European Union, to get a trade agreement done …. The UK is going to be in the back of the queue.”

The bilateral trade agreement the US is negotiating with the EU is the Transatlantic Trade and Investment Partnership (TTIP), which would reduce regulatory barriers to trade for big businesses on food safety law and environmental and banking legislation, which is thought to have been derailed by the UK’s decision to leave the EU.

Digby said the UK would be about £10bn a year better off by TTIP “so the government should also explore the possibility of joining the final deal, as a third party” as the UK seeks to leave the EU.