US business confidence in the UK has fallen for the third consecutive year, with the fallout from Brexit being cited as one of the main reasons for the collapse in confidence.
The Transatlantic Confidence Index, published by BritishAmerican Business (BAB) and Bain & Company, today found that the US average business confidence rating for the UK dropped to 6.5 from 7.3 out of 10 in 2022.
Of the 79 companies surveyed, which do business in both countries, three quarters said the repercussions of the UK’s exit from the European Union was one of their top three concerns.
Other problems US respondents cited included the upcoming increase in corporate tax, stagnant economic growth and a rocky political landscape in the UK.
Duncan Edwards, chief executive of BritishAmerican Business, said: “It is no surprise that the political turmoil seen in the UK over the last twelve months has taken its toll. This instability, coupled with ongoing concerns over Brexit, growth prospects and taxation have led to a drop of confidence in the UK for a third year in a row.
“The message from US investors is clear. They are calling for a stable political environment and business friendly policies from the UK government.”
By contrast, the index found that UK business confidence in the US economy is far stronger at 8.4 out of 10, with 75 percent believing they will ramp up investment in the US over the coming years.
This comes as Prime Minister Rishi Sunak met with President Joe Biden last week to reveal their ‘Atlantic Declaration’, an alliance between the UK and the US with the objective of tightening their economic relationship and boosting investment.
Jonathan Frick, partner at Bain and Company, said the findings show “important challenges, on both sides of the Atlantic, but especially in respect of US investors’ confidence in the UK”.
“These are a call to action for both governments as well as businesses in the two countries to work together proactively to further strengthen our transatlantic ties.”