Jonathan Blair, managing partner of U.K. law firm Bond Dickinson shares his thoughts on why the U.K. remains a solid investment for U.S. dollars in this latest addition to our multi-part video series discussing the U.K.’s decision to leave the EU and the potential challenges and opportunities Brexit poses for businesses on either side of the Atlantic.

Mark: Right.  And, Jonathan, if I’m a business leader here in the United States, we’re holding dollars, and we’ve got low cost to capital, low interest rates and we look across the Atlantic at the UK, where do you see the opportunity in the UK at this point?

Jonathan Blair: I think, you know, the UK is, it’s a strong economy.  It’s the fifth largest economy in the world.  It’s got low unemployment.  It is a good bet in terms of investment generally.  I agree that, I mean, Sterling is not going to stay at the low level that it currently is.  So if you’re bold and you believe that the UK economy is not going to go into some sort of prolonged recession, it isn’t, I mean, just on that by the way, there has been a couple of references to _______ [Typist’s note – sounds like “Liam.”] and it’s probably worth while just focusing on that for a moment.  The banks are in a very good and very strong position, you know, we are not talking about the sort of scenario we saw in 2008 where the banks were over stretched and there was not the liquidity.  The liquidity is there.  The Bank of England has spent a lot of time since 2007 and making sure that the situation is a robust one so, you know, we’re not in that scenario.

So, the UK is a good bet.  I think that the worry, actually the political worry within the UK, and we saw a little bit of that with the recent arms transaction which did go ahead, is the extent to which the UK becomes vulnerable to say opportunistic acquisition.  I think we are moving beyond the period of, of the shock of uncertainty into a more benign environment.  I think people, to a certain extent, frankly, because this is confidence driven, they get bored, we want to move on, we don’t want our businesses to pause.  We want to continue.

I think if you look at the U.S. and the UK, the special relationship.   We haven’t talked about that at all yet on the panel, but that is, I think that’s going to become even more important in the coming years than it perhaps has been in the in the last five or so years.  You know, it reached sort of a passionate high with Reagan and Thatcher.  Everyone was deeply in love with each other across the Atlantic and perhaps in more recent years we haven’t seen that sort of warmth.  I think, you know, provided the UK can negotiate a strong and robust exit from the European Union, and I believe it will, a lot of people have put a lot of faith in Theresa May.  I personally think she’s the best person to be in this negotiating position.  Angela Merkel’s going to take a strong ____________, in other words, you’re going to have a very significant role in there, and I think that looks and feels better than perhaps let say, and not trying to be overtly political here, some of the other alternatives we might have had negotiating there.  And, I think that the special relationship is something that we need to look closely at.  You know, in terms of foreign direct investment, the UK is the largest investor in the U.S. of any country.  You know, it is huge the investment that the UK, we, you know, the UK is responsible for generating about a million jobs in the U.S.  So, I think this is a real opportunity.

In terms of sectors, you know, where would we, where would we look?  You know, Fintech is one that, you know, is particular, particularly close to people’s hearts there in Charlotte.  It’s a growing area in, in the UK as well.  I mean, that’s one of the industry’s which is quite exciting and potentially very well worth while looking at.

View Part 1 - Brexit: Overview and Reactions

View Part 2 - Brexit: Currency Issues and Inflation

View Part 3 - Brexit: Outlook for the EU and Impact on the U.S.

View Part 5 - Brexit: The Impact on Mergers and Acquisitions

View Part 6 - Brexit: What the U.K.’s Exit Might Look Like 

View Part 7 - Brexit’s Potential Impact on Corporate Passporting and the Banking Industry

View Part 8 - Brexit’s Potential Impact on Corporate Passporting and the Banking Industry