Investors are becoming gloomier about Britain's future prospects, a survey has found, with the U.K.'s EU membership referendum given as a possible reason.
Ernst and Young's 2016 attractiveness survey, which measures how appealing the U.K. is as a destination for foreign direct investment, found that investors are much less optimistic about Britain's future outlook than they were a year ago.
"The future outlook is less certain this year than at any time in recent memory," Ernst and Young's Chief Economist Mark Gregory and U.K. Chairman Steve Varley said in a joint statement.
"It does seem possible that the upcoming referendum on the UK's membership of the EU is…weighing on investors' minds," they wrote. "It is certainly the case that our research demonstrates that any deterioration in the terms on which U.K.-based businesses can access the European Single Market (ESM) would be a concern for investors."
When asked how likely they were to invest in the UK in the next year only 23 percent of investors responded positively, down from 27 percent last year. This is the lowest U.K. figure since 2010.
Only 36 percent of investors expect the U.K.'s attractiveness will improve compared to 54 percent last year. This is the lowest UK score since 2004.
"Access to the European Single Market (ESM) has consistently been identified by as an important element of the UK's overall attractiveness by foreign investors in our surveys since 2014," the report said. In 2016, 79 percent of investors cited access to the single market as a key feature of the UK's attractiveness, up from 72 percent last year and 63 percent the year before.
When asked about how either a significant or substantial decline in the terms of access to the single market would impact the UK's attractiveness, more than 50 percent of investors said it would have a negative effect and only 7 percent viewed it positively.
Uncommon Knowledge
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