Despite facing political upheaval and challenges, the UK has retained its position as the second most attractive destination in Europe for foreign direct investment (FDI), according to the recent UK attractiveness survey by EY. The UK’s “global approach” and its ability to deliver value to FDI projects have contributed to its strength in the face of adversity.
FDI Performance
The UK recorded 929 FDI projects in 2022, slightly down from the previous year. However, the nation excelled in terms of project value, delivering the highest total jobs in Europe and more jobs per project than major competitors like Germany and France. This highlights the UK’s ability to create meaningful and impactful FDI initiatives.
Although FDI in tech projects experienced a 23.3% decline, the UK remained ahead of other European countries in this sector. The nation’s resilience and attractiveness are due to its ability to navigate challenges and maintain its position as a leader in technology-based investments.
The United States and India emerged as the leading sources of FDI for the UK in 2022. The US accounted for nearly a quarter of the projects, while India contributed 8.8%, representing a significant increase in Indian-backed projects across Europe.
UK’s global approach and cultural connections
EY’s UK chief economist, Peter Arnold, highlighted UK’s global approach, which has become increasingly important since Brexit. Countries like India, Canada, and Australia have risen as top investors, leveraging strong cultural links that provide a competitive advantage over other European countries. The UK’s participation in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and potential trade deals, such as with India, offer more opportunities for a globally oriented UK.
Regional Attractiveness and Job Creation
While London remained the most favored location for investment, Scotland and various English regions have also attracted many FDI projects. Scotland retained its position as the most attractive location in the UK outside of London, with a record-high percentage of projects. Additionally, several regions in England and Wales saw a 10% increase in FDI project numbers.
Despite facing political uncertainty and the ongoing impact of Brexit, the UK has demonstrated its resilience in attracting FDI. The nation’s focus on delivering value, strategic importance, and job creation has helped the country to be seen as an attractive investment destination.
If you are looking to expand or relocate staff to London get in touch with our friendly team to find out how we can support you and your team.
