US, Japanese companies lead foreign investment in Britain

LONDON (REUTERS) - United States (US) and Japanese companies led an increase in foreign investment in Britain in the year to March, a government report said on Wednesday.

As Britain attempts to revive its economy, the government has cut corporate tax rates to attract foreign firms and given more resources to the organisation which promotes trade and investment in Britain abroad.

The report showed financial services, advanced manufacturing and creative sectors attracted the bulk of the investments.

The number of new foreign investment projects started during 2012/13 rose almost 11 per cent to 1,559 year-on-year, extracts from the report, due to be released later in the day, showed.

It did not value the projects, but said they had created 60,000 jobs and protected a further 110,000.

Japan, which is historically one of the country's largest investors including in car plants, has hinted that political debate over whether Britain should stay in the European Union (EU) may affect future investment.

It said last week that access to the European market made Britain attractive and it expected the country to maintain a major role in the EU.

A United Nations report in June registered a 22 per cent rise in foreign direct investment flowing into Britain compared with an 18 per cent worldwide fall in such investment in 2012.

Accountancy firm Ernst and Young said Britain was Europe's top recipient of foreign investment funds in 2013.

On Tuesday, Bentley Motors, the luxury car division of Germany firm Volkswagen, said it was investing 800 million pounds (S$1.55 billion) over three years to build a new line of vehicles in north-west Britain.