LONDON (AFX) - Iran's actions over its nuclear programme are beginning to cause "serious damage" to investor confidence there, said UK Foreign Secretary Jack Straw.
Speaking on BBC radio ahead of a speech on Iran here, Straw added there had been a "flight of capital" out of the country, without citing sources for this claim.
"The result of Iran putting itself beyond the pale in the international community has been a serious damage to investor confidence," he said.
"The Iranian stock exchange, which is actually quite busy normally, has declined significantly."
"There's been a flight of capital out of the country and even more worrying for the regime, the brightest and the best of Iranians continue to leave the country in large numbers."
In his speech to the International Institute for Strategic Studies, Straw said Iran was moving in the "wrong direction" with repression at home and confrontation abroad.
He accused the hardline leadership of President Mahmoud Ahmadinejad of adopting "policies at home and abroad which risk real damage to Iran's reputation and its relations with the rest of the world."
"Iran and the Iranian people deserve better," Straw said.
Ahmadinejad's predecessor Mohammad Khatami had been moving in the "right direction" with political freedoms and "a debate about how Islam could be reconciled with modern understandings of democracy and human rights", he added.
Straw said the international community was right to be worried about Iran's nuclear programme because it could affect the stability of the region, leading other states to seek biological, chemical or nuclear weapons.
In Tehran earlier, Ahmadinejad vowed to press on with the country's nuclear activities and played down the threat of economic sanctions ahead of a key UN Security Council meeting on the country's atomic program.
Iran kicked off the recent standoff by refusing to comply with an IAEA demand to suspend the research activities on enrichment it had resumed on January 10.
