"The Northern Ireland protocol deal will help revive business investment into the UK from global investors, "Nigel Green, CEO and founder of one of the world's largest independent financial advisers, has stated.
The recent Brexit deal with the EU aims to overhaul Northern Ireland's post-Brexit trading arrangements, ease concerns from the US about the Northern Ireland situation, and restore devolved government in Belfast, thus bringing an end to the bitter dispute between the two sides.
Since the 2016 Brexit referendum, business investment into the UK from global investors has been on the decline due to major uncertainty caused by the possibility of an all-out trade war between the UK and the EU, in addition to the multifaceted political fallout. This uncertainty has deterred investors from heavily investing in the UK.
According to Jonathan Haskel, a Bank of England interest rate setter, Brexit has caused a direct loss of £29bn in business investment and fueled the slowdown in productivity, with a lack of business investment growth since the referendum being equivalent to 1.3% of UK gross domestic product (GDP).
The deal announced on February 27, which settles the dispute that has been raging since 2021, when the UK left the EU single market and customs union, is expected to unleash business investment that has been held back by global investors. Green believes that the deal will give the British pound a much-needed bounce and improve trading relations between the UK and the EU, thereby bolstering investor sentiment on Britain's economic outlook.
Since Brexit, the pound has fallen nearly 18% against a basket of currencies and has been out of favour with FX traders. However, Green believes that the deal on the Northern Ireland protocol could mark a turning point for the pound and investors, who require certainty to invest. He concludes that "this deal on the Northern Ireland protocol helps bring that back."
