Britain and the U.S. have been doing business in various forms for over 200 years and it is difficult not to come across a U.S. company, whether in the financial center of the City of London, or in a remote Welsh village. In fact, 99 of the top 100 Fortune Magazine companies, and fast-growing numbers of smaller corporations, have invested in the UK.

Last year, for example, Britain attracted record levels of inward investment -- 46 percent of it from the U.S. -- making the UK the No. 1 destination in the European Union (EU) for American and Japanese companies.

As of March this year, U.S. corporations already had committed to investment in factories, research centers, European headquarters operations, and call centers, totaling more than $650 million in Britain. This conservative figure is based only on those companies which chose to release financial information. The true figure is most likely more than double that.

Add to this the $20 billion spent last year by U.S. firms on acquiring and expanding companies in Britain, and you begin to appreciate the scale of the investment. According to recent statistics from the U.S. Embassy in London, some $120 billion is invested by U.S. companies in all industries in the UK.

But why is Britain the preferred location for so many U.S. firms?

According to Ian Lang, who was President of the government's Board of Trade in the last administration, [Britain held a General Election on 1 May and the majority ruling party is now Labor, as opposed to Conservative], it is because the UK provides Europe's most competitive environment for business.

This is pledged to continue under the new government.

"We have inflation running below 2.5 percent and an economic growth level above the European average," said Mr. Lang, writing in the latest "Review of Operations" of the government's Invest in Britain Bureau (IBB). "Unemployment has fallen for nearly all of the last 30 months and industrial disputes are among the lowest in Europe. Corporate tax is low; so are interest rates, while personal taxes are the lowest in the European Union. Our degree of labor flexibility is unsurpassed."

Encouraging predictions regarding Britain's future economic strength also come from the influential Paris-based Organization for Economic Cooperation and Development (OECD) and the Confederation of British Industry (CBI), the UK's largest national business organization representing 250,000 of Britain's leading companies.

The OECD proclaimed on 16 December last year that "prospects for growth and inflation in Britain are the best for 30 years."

The pace of expansion is expected to rise from 1996's 2.4 percent to 3.3 percent in 1997 and to remain high at 3 percent in 1998. The end-of-year assessment of major economies puts Britain jointly first with Canada in the growth league tables, with a rate of expansion in 1997 that will be comfortably ahead of those achieved by France, Germany, Italy and the rest of Europe.

The OECD believes Britain's inflation will fall below the target level of 2.5 percent, or less, set by the government and remain there without early and steep rises in the cost of borrowing.

The report -- together with government figures showing living standards up by 4.5 percent, unemployment below two million for the first time since 1991, and the best trading figures for a decade -- prompted Kenneth Clarke, the then Chancellor of the Exchequer, to say on 20 December that Britain was entering 1997 in the best shape for a generation.

At around the same time the CBI, a respected and traditionally accurate economic forecaster, predicted robust economic growth at 3.1 percent for Britain in 1997. GDP growth is predicted at 2.7 percent in 1998.

The CBI says that manufacturing output will continue to grow strongly in 1997 when 3.4 percent growth is expected, easing to 3.3 percent as demand growth slackens. It expects underlying annual retail price inflation to ease to 2.5 percent by the end of this year and pick up modestly to 2.9 percent by the end of 1988, and headline inflation to end 1997 at 3 percent and average 3.3 percent at the end of next year.

All-in-all, these government figures and statistics from two well-regarded institutions sing the same song ... Britain is in good economic shape and appears set to continue in this mode for at least another two years.

Another important fact of interest to U.S. companies considering expansion in Europe is that the UK has among the lowest labor overheads in the EU, and is the only G-7 country that has seen a fall in non-wage labor costs (as a proportion of total labor costs) since 1980.

Non-wage labor costs in manufacturing (1995) are now amongst the lowest in G7 and the EU. For every £100 paid in wages, employers must add £31 in Germany, £41 in France, over £44 in Italy, but only £15 in the UK.