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Home > News and Publications > The financial system and productive investment: new survey evidence - Quarterly Bulletin 2017 Q1 pre-release article
 

The financial system and productive investment: new survey evidence - Quarterly Bulletin 2017 Q1 pre-release article

08 February 2017

The Bank of England has undertaken an innovative new survey that collects data on business investment and financing decisions — the first of its kind in the United Kingdom.

About two thirds of UK businesses deemed that their investment levels have been appropriate in recent years, but one third felt that their investment had been too low. Businesses that regarded investment as too low cited financial and real economic barriers to investment.

Why do some firms underinvest?

Obstacles to investment

Source: Bank of England Finance and Investment Decisions Survey.

When making investment decisions many firms impose a fixed required rate of return, or ‘hurdle rate’, on investment. The average hurdle rate across UK businesses was 12%.

 Read the full article

This article was written by
Jumana Saleheen and Iren Levina of the Bank’s Financial Stability Directorate and Marko Melolinna and Srdan Tatomir of the Bank’s Monetary Analysis Directorate.

Finance and Investment Decisions Survey questionnaire

Data for the tables and charts

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