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77% of EU firms to reduce UK capacity as result of Brexit - UBS

Uncertainty related to the UK's exit from the European Union, together with the uncertainty of the new US administration's policies, are the main political risk factors perceived by Eurozone corporates.

Research by UBS Evidence Lab looked at how Eurozone corporates assess political risks and found that, of the 600 corporates in the study, 74 per cent have investment in the UK and about one-third of those expect to cut their UK investment to some extent, while 54 per cent said that Brexit would not affect their investment plans.

More than half – 56 per cent – said they will respond quite quickly to the Brexit scenario within the coming 12 months. The Eurozone will be the key beneficiary of firms moving investment out of the UK.

Some of the key findings in the study include:

  • 41 per cent of companies said they expect to remove 'a large amount' or 'all' of their capacity from the UK as a result of Brexit;
  • a further 36 said they expect to remove 'a small amount' of their capacity out of the UK post Brexit, bringing the total of companies expecting an overall negative result on capacity in the UK to 77 per cent;
  • 54 per cent of the companies said they did not expect Brexit to lead to a change in their investment plans;
  • 24 per cent anticipate reducing their investment plans "somewhat" and 8 per cent "significantly";
  • 12 per cent even expect to increase their investment in the UK post Brexit.

CTMfile take: This survey by UBS seems to be good news for the Eurozone, which can expect some increased investment from Eurozone firms looking to rebalance their operations and investments away from the UK. But it's not all bad news for the UK either - 36 per cent of Eurozone companies with investment in the UK only intend to move 'a small amount' of capacity away from the UK and 54 per cent said there will be 'no change' to their investment plans post Brexit.

This item appears in the following sections:
Cash & Liquidity Management
Cash & Liquidity Management in Europe
FX Management & Crypto
Buying & Selling FX
Risk Management
Financial Risk Management

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