The UK has retained the top spot as the most attractive country in Europe for foreign direct investment, despite a 32 per cent annual drop in 2024.
The latest Attractiveness Survey for Financial Services, from EY, showed investment across Europe fell 11 per cent year-on-year, from 329 projects in 2023 to 293 projects in 2024.
Martina Keane, EY UK and Ireland financial services managing partner, said: “The strength and depth of the UK’s financial services sector continues to capture global investor confidence — particularly as they navigate challenging market conditions.
“But competition is fierce, and while the UK industry is a clear leader, we cannot ignore the fact that investment levels have declined over the past year.”
Employment arising from financial services projects across Europe also declined in 2024, following three successive years of growth.
Where available, publicly disclosed job figures showed employment from UK financial services projects more than halved from 5,019 in 2023 to 2,408 in 2024, and in the EU publicly disclosed employment linked to financial services FDI was down a third year-on-year.
The largest source of financial services investment into Europe came from the US, although projects were down from 91 in 2023 to 72 in 2024.
Overall, the US backed a quarter (25 per cent) of all financial projects into Europe in 2024.
The UK was again the leading recipient of US investment. Although projects fell from 38 in 2023 to 28 in 2024, a drop of 2 per cent.
Keane added: “Both industry and government are taking positive action to prioritise growth and innovation in UK financial services, and this collaboration must continue.
“Future success rests on not just maintaining, but growing the attractiveness of the UK’s financial services sector on the global stage. To do this, we must build on our inherent strengths and prioritise progressive regulation, innovation and the continued establishment of key international trade relationships.”
Omar Ali, EY global financial services leader, said cross-border investment remains key for global financial services as geopolitical uncertainty has weighed on investor sentiment and business confidence.
He added: “With FDI levels down on previous years, it is more important than ever that Europe’s major markets find ways to outwardly demonstrate the pull factors that investors are looking for and collaborate where needed to keep investment within the region.”
tara.o’[email protected]
What’s your view?
Have your say in the comments section below or email us: [email protected]
