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Weak Pound Attracting Foreign Investment

Thu, 22nd Aug 2019

The UK tech sector has seen a surge in investor interest from the US and Asia over the course of this calendar year, with more foreign investors pouring cash into the country in the first seven months of 2019 than in the whole of 2018.

The biggest Asian investors in UK tech this year have been Japan and Singapore. The weak pound has made investment in the UK attractive to those in Asia. The pound is currently at a two-year low against the dollar, which makes valuations look comparatively low.

This is proving true not just for investment in the top flight tech companies, but also for start-ups. There are more and more requests from start-ups who are looking for capital financing from Asian investors.

Asians Hedging Against a Trade War

Foreign investment in UK companies is attractive to Asian investors who are looking to hedge against a trade war as tensions between the US and China escalate. Europe provides investors with an appealing option, but the UK’s weak pound makes it even more appealing than the wider EU.

There are some fears about what will happen in the event of a no-deal Brexit, however. If EU nationals are unable to work in the UK then this could leave the country faced with a skills shortage in many industries, not just tech. The tech industry could, however, be hit severely, since one in five tech workers in the City right now is an EU national.

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