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UK is Europe’s most attractive location for international investment

posted onMay 11, 2018
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The UK continues to be attractive to foreign investors, who are ready to pour more money into the economy every year, despite Brexit. The country ranked first in Europe in terms of the total value of foreign direct investment projects launched in 2017, according to fDi Markets, a crossborder investment analysis department from the Financial Times. The influx of foreign direct investment in the UK totalled $33.2 in 2017. Russia came second in the ranking with  $15.9 biliion followed by Poland with $14.8 billion.

Furthermore, FDI into the UK created an all-time high of 2,265 FDI projects creating more than 75,000 jobs according to the most recent report from the Department of International Trade for 2016-17. According to Trading Economics, FDI in the UK averaged 12366.23 GBP Million from 1987 until 2017, reaching an all time high of 82539 GBP Million in the third quarter of 2005 and a record low of -44536 GBP Million in the second quarter of 2009.

UK FDI

In Russia FDI averaged 5985.18 USD Million from 1994 until 2018, reaching an all time high of 40140 USD Million in the first quarter of 2013 and a record low of -3922 USD Million in the fourth quarter of 2005.

Russia FDI

In Poland,  Foreign Direct Investment averaged 96695.52 EUR Million from 1996 until 2016, reaching an all time high of 178256.70 EUR Million in 2012 and a record low of 9228.20 EUR Million in 1996.

Poland FDI
 

Looking ahead, in March 2019, the UK will officially leave the EU and no one knows yet quite how this will look. However, London retains its crown as the leading major city for FDI in fDi's European Cities and Regions of the Future 2018/19 ranking. London welcomed 1,880 foreign investments in the five years to September 2017, the highest of all 301 cities included in the ranking. The city’s investment landscape was dominated by the service sectors. Nearly half of all investments made were in software and IT services, followed by almost one-fifth in business services and more than 12% in financial services.

The UK’s capital city also topped the ranking for Business Friendliness and Human Capital and Lifestyle categories - following the UK’s high performance in various indices, including the World Bank’s Ease of Doing Business ranking and three of the city’s business schools feature in the Global MBA Rankings for 2016.

To create a shortlist for fDi European Cities and Regions of the Future 2018/19, the fDi collected data for 489 locations (301 cities, 150 regions and 38 LEPs) under five categories: Economic Potential, Labour Environment, Cost Effectiveness, Infrastructure and Business Friendliness. 

Another report shows no dramatic collapse in sentiment towards the UK as an attractive destination for foreign investment in the aftermath of the EU Referendum vote. The report, entitled ‘Inward investment after Brexit’, is part of EY’s UK Attractiveness Survey which is released annually in the summer.

Out of the 440 foreign investors surveyed, 21% said they had changed their UK investment plans since the EU Referendum vote in 2016 - a third (7%) of this group had actually increased their investment in the UK since that time, whilst 6% had reduced their commitment and 8% had put their plans on hold. 

EY’s Chief Economist, Mark Gregory, commented: “The UK consumer is clearly a valuable asset and some companies appear to be moving assets into the UK to ensure they can continue to access their customers after Brexit. Conversely, those with an export focus are moving assets out, anticipating changes to trading arrangements.”