Britain topples Germany to become Europe’s top investment spot #NewsGerman

Britain has leapfrogged Germany to become the most attractive place to do business in Europe, even as Rachel Reeves’s record tax raid threatens to bring investment to a halt.

PwC’s annual survey of global chief executives warned this year’s “vote of confidence” in Britain could only be sustained by pro-growth policies as it urged the Chancellor not to squander its position of “relative stability”.

However, Marco Amitrano, of PWC, said business leaders had been “rocked” by Ms Reeves’s Budget as he warned that corporate Britain was reaching its limit on tax rises.

“Business clearly feels a little bit rocked, but personally I don’t believe that the relationship between business and Government is fractured,” he said, “more a fault line”.

“Is there going to be a welcome response to even higher taxes? No.”

Ahead of the World Economic Forum (WEF) meeting in Davos, Switzerland, the survey of almost 5,000 chief executives from more than 100 countries revealed that the UK has overtaken Germany and China to become the second most attractive place to invest behind the US.

This is the first time that the UK has held second position since PwC started running the survey almost three decades ago.

The UK’s rise from fourth position last year comes as Germany continues to struggle with an energy crisis triggered by Vladimir Putin’s invasion of Ukraine in 2022 and investors remain wary of investing in China as the threat of huge tariffs looms.

Ms Reeves will use a series of meetings in Davos this week to try to woo the new US administration as Sir Keir Starmer seeks a trade deal with President Donald Trump.

PwC’s survey showed UK chief executives were also more upbeat about the country’s prospects, particularly in terms of AI adoption, with 61pc anticipating growth in the coming year, up from 39pc in 2024.

The global survey was conducted between the start of October and first week of November, meaning that many bosses felt confident about the UK despite the anticipation and announcement of higher taxes.

However, business surveys in the aftermath of the Budget have consistently blamed Ms Reeves’s £25bn employers’ National Insurance raid for dragging down confidence. Companies large and small have warned that they will raise prices and cut jobs as a result of the size of the tax changes, which came as a shock to many bosses.

The global survey also reflects how executives have lost confidence in other major economies including Germany, where economic growth has stalled for two straight years, triggering the collapse of the government, and France, which is struggling to deal with rising debts. PwC also noted that investment interest in China had “fallen dramatically” as the threat of a global trade war looms.

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