Business travel to the UK is declining despite the sharp fall in the value of the pound since last year’s Brexit vote.

The pound’s slump has been one of the most clear-cut results of the British electorate’s decision to leave the European Union. At the time of writing it is 13.4 percent down on the dollar and 16.8 percent down on the euro.

The number of overseas travelers arriving on business is down 4 percent for the quarter that ended June 30 and 3 percent for the first half of the year. With the pound at the lowest rate against the euro in almost eight years, you’d expect business travel to the UK to be booming. The fact that it isn’t is concerning for the UK economy.

Business travel out of the UK is also suffering. It would seem that companies are less willing to fork out the extra cash required to travel, with business travel from the UK down 7 percent over the last quarter and down 1 percent through the end of June.

IHS Markit, a corporate information firm, reported last month that UK business confidence was at its lowest since October 2011 with service sector companies in particular more pessimistic about profits than at any other point in the last six years.

“The survey shows that companies have become increasingly worried about the business outlook, largely as a result of heightened political uncertainties and the potential impact of Brexit,” said Chris Williamson, the company’s chief economist.

Despite the lackluster performance, not everybody is panicking. The GTMC, an organization that represents the business travel community in the UK, believes there are mitigating factors to the slight downturn.

“Certainly Easter falling in April does have a part to play, coupled with the general election in June. Political change often has an impact on business travel volumes and can trigger a small but discernible decline,” a spokesperson for the organization said in an email.

“As a result such a downturn during this period is not unexpected given the wider uncertainty of the political and economic landscape,” the spokesperson wrote. “On a more positive note our own transactional data demonstrates a similar level of performance year on year during the same period. Reassuringly for the business travel and TMC [travel management company] community this would suggest that more companies are using the services and expertise of a TMC during this same period. In turn business travel has remained constant which is good news for the wider economy.”

Jason Geall, vice president and general manager of Northern Europe operations for American Express Global Business Travel, said: “There is much to be positive about when it comes to business travel and international trade. Smart businesses of all sizes are looking ahead, exploring growth opportunities beyond the European Union and marketplaces in which they already operate.”

“We’re seeing increased travel between the UK and countries such as India and Australia,” he said. “Business travel in manufacturing, professional services, pharmaceutical and technology sectors is performing well across many regions.”

Better News

While inbound and outbound business travel visits might be falling, the UK economy is benefiting from an influx of foreign tourists. Vacation visits are up 20 percent over the past three months and the same number for the year to date. June also saw a record for the total amount of visitors in the month.

“Tourism is one of Britain’s most valuable export industries and this continued growth demonstrates the industry’s increasing importance as a key driver of economic growth across our nations and regions,” said VisitBritain director Patricia Yates.

Unsurprisingly, given the fall in value of the pound against the Canadian and U.S. dollars, arrivals from North America are growing. In June there were 650,000 visits, up 35 percent on the same month last year.

“There’s always a market at the right price, and movements in exchange rates can make a destination that was premium-priced at one moment attractive at the next moment and vice versa,” said Tom Jenkins, chief executive of the European Tourism Association. “For customers paying in dollars, sterling is the lowest it’s been for over 30 years; so, it’s not surprising that savvy Americans are in the UK enjoying their spending power.”

The UK is now a much more attractive place for overseas visitors than it was in mid-2016 but at the same time residents are finding it much more expensive to leave the country. At the moment this hasn’t led to a slow down. UK residents are traveling abroad on holiday in greater numbers with an increase of 3 percent in the last quarter.

Photo Credit: Business travel to and from the UK has been down for the first part of the year. Pictured is traffic passing the Houses of Parliament and Elizabeth Tower in London. Luke MacGregor / Bloomberg