'Weak pound makes inward investment more attractive'

Published on Sunday 1 February 2009 20:37

SCOTLAND'S financial services industry should benefit from the weak pound as overseas businesses invest in the sector, a senior legal figure has claimed.

Chris Mullen – senior partner at international law firm Pinsent Masons, which has offices in Edinburgh and Glasgow – said Scotland's financial expertise, skills and flexibility will continue to attract business investment, despite the recession.

But Mullen warned that the recession would be "very tough" and that the impact would be "just as acute" among Edinburgh's financial institutions as in other parts of the world.

He said the UK had been among the first countries to respond to the threat of recession – ahead of financial powerhouses such as Hong Kong and the Gulf – and that the country may reap the benefit by emerging more quickly from the downturn.

Mullen told The Scotsman: "There are a multitude of factors that combine to attract international businesses to Scotland and a good many of those fundamentals remain unchanged, in some cases even enhanced.

"The weak pound, for example, makes inward investment into the whole of the UK significantly more attractive for business, and Scotland's financial expertise, skills and flexibility will continue to attract business investment, particularly in the financial services sector."

When asked about the recession, Mullen added: "The issues facing some of Edinburgh's financial institutions are replicated globally so the impact in Scotland will be just as acute in other economies.

"I think we're going to have it very tough. The advantage we have over some of the countries we operate in – the Middle East, Far East and the Gulf – is that we got into this earlier and had a pretty quick response by the government.

"That has now begun to happen in China and the Gulf, but it happened a bit later." He added: "I was in the Gulf last November and it was clear that it was only just dawning on the commercial business sector there that they were going to be badly affected.

"In Hong Kong, it was the same mood – a little bit like a rabbit in the headlights. They were only just appreciating that they were not immune to the problems.

"We got into it sooner and, hopefully, the action taken will help get us out of it."