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EU is ‘a difficult place for business’, says Pippa Malmgren

Pippa Malmgren, who is a leading US economic adviser, has ripped into business scaremongering around the Brexit uncertainty.

Dr Malmgren, who also serves as an adviser to the UK Department of International Trade, pointed out that foreign investment in the UK is still rising despite Project Fear.

She added that Britain is far better place to do business than Europe, where taxes and regulatory red-tape are an economic barrier to investment.

These remarks follows news that the pound has fallen to its lowest level against the dollar and the euro this year.

At the same time, Britain’s economy rebounded in the second quarter this year despite Brexit uncertainty according to Office for National Statistics figures.

Dr Malmgren, who previously served in the White House under George W Bush, discussed the British economy in light of the growing risk of a no deal Brexit.

The businesswoman told Bloomberg: “The key thing to remember is that many of the investors are saying I may not like the uncertainty of Brexit, but it is not easy to make money on the continent.

“It is not an either-or situation. Foreign direct investment in the UK is still rising.

“The huge irony is that the weaker the sterling is, the more competitive the UK is.”

She added: “Money is a lot like water and it will move where it faces the least resistance.

“Unless the UK raises its taxes and regulatory red tape above the EU, then capital will continue to flow into the UK.

“More so still if the sterling is weaker.

“This idea that the City of London has to be smaller if there is no deal after Brexit simply doesn’t add up.”

The growing possibility that talks between the UK and Brussels will break down in the coming months has sparked economic fears.

Despite this, long-term investment in Britain by foreign businesses stood at £1.564 trillion, which is £12 billion or 0.8 percent higher than in 2016.

The world’s fifth-biggest economy relied on the services industry for growth in the second quarter.