UK Businesses Turn Inward Amid Declining US Appeal
British business leaders are increasingly turning their backs on the United States as an investment destination, according to a recent survey by Deloitte. The survey, which polled chief financial officers (CFOs) from major UK firms, reveals a sharp decline in enthusiasm for investing in the US. This marks a significant shift in sentiment from late 2024, when the US was still seen as a highly attractive market.
The findings show that only a net balance of +2% of CFOs now view the United States as a favorable investment destination. This is a dramatic drop from +59% in late 2024, a period just before Donald Trump resumed office as President. The change in perception is attributed to growing uncertainty around US economic policies, especially concerns about new tariff measures.
UK and India Rise in Investment Favorability
While confidence in the US has waned, British executives are becoming more optimistic about their own domestic market. Deloitte’s survey indicates that the UK has risen to the top spot, alongside India, as the most attractive investment destination. The net balance for the UK improved to +13% from -12%, highlighting a significant turnaround in business sentiment.
Richard Houston, Deloitte UK’s senior partner and CEO, commented on the findings: “These results reveal a shift in sentiment with the UK now viewed as a leading global investment destination. This renewed confidence, coupled with a rise in risk appetite, is welcome and underscores the considerable investment potential the UK offers.”
US Still Ahead of Europe and China
Despite the fall in US favorability, the country remains more attractive than other developed economies such as Europe and China. Deloitte’s survey showed that both regions recorded negative net balances in terms of investment appeal among UK executives, suggesting that the global investment landscape remains uncertain.
The survey results come on the heels of official US data showing a sharp decline in foreign direct investment during early 2025. This downturn coincided with the reintroduction of tariff policies under President Trump’s administration, which have contributed to economic unpredictability and reduced investor confidence.
UK’s Investment Position in the US Still Significant
Despite the recent change in sentiment, historical data underscores the importance of the US-UK investment relationship. In 2023, the UK was the fourth-largest direct investor in the United States, with assets totaling $636 billion according to US government data. This long-standing financial connection continues to play a significant role in bilateral trade and investment flows.
The shift in investment sentiment suggests that UK firms may now prioritize local and regional opportunities over transatlantic ventures. This could potentially reshape the flow of capital in the coming years, depending on how domestic and international policies evolve.
Business Confidence Sees Modest Uplift
Deloitte’s CFO survey also found a modest improvement in overall business confidence among UK corporate leaders. The optimism index inched upward to -11% from -14% in the previous quarter. Though still in negative territory, the rise indicates a slight but noteworthy increase in business sentiment.
However, broader economic indicators suggest that the UK economy continues to face challenges. Many business surveys point to sluggish growth, placing pressure on policymakers. Market analysts expect that Chancellor Rachel Reeves may be forced to raise taxes in the upcoming budget to address fiscal concerns.
Survey Scope and Methodology
Deloitte conducted its survey between June 16 and June 29, 2025, polling 66 chief financial officers and executives from major UK companies. The sample included 37 publicly listed firms with a combined market capitalization of £386 billion. The findings provide valuable insight into the investment strategies and confidence levels of some of the UK’s most influential business leaders.
Overall, the survey signals a recalibration in investment strategies among British businesses, with a renewed focus on domestic and Indian markets, and a marked decline in enthusiasm for the United States amid political and economic uncertainties.
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