Selected Issues Papers

Enhancing Business Investment in the United Kingdom

Author/Editor:

Agnese Carella ; Ruo Chen ; Xiaobo Shao

Publication Date:

July 13, 2023

Electronic Access:

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Summary:

The paper addresses the issue of weak business investment in the United Kingdom (UK) by analyzing aggregate investment trends in the UK and other G7 peers, and investment drivers for UK firms. Data show that business investment has been structurally low in the UK, and likely the key driver of the UK’s relatively weaker growth performance since the middle of the last decade. Econometric investigations confirm a negative impact of Brexit-related uncertainty, the importance of financing constraints on firms, and a complementary role for public capital.

Series:

Selected Issues Paper No. 2023/050

Subject:

COVID-19 Expenditure Financial markets Health International organization Market capitalization Monetary policy National accounts Private investment Public investment spending

Frequency:

Regular