According to new research by professional services network EY, the UK is leading Europe in foreign direct investment (FDI) in financial services.
The EY Europe Attractiveness Survey showed that the country enjoyed 6% FDI growth in 2023, although it still lagged behind pre-Brexit levels. In broader economic terms, the UK emerged from its recession, growing 0.6% in the first quarter of 2024.
Despite a series of international political and economic shocks in 2022, investors found stability in UK markets such as IT and software. London leapfrogged above Paris as Europe’s premier investment region, and financial service projects proved particularly important, with the British capital seeing a 20% increase.
EY’s data found that the UK led other European FDI markets, attracting 108 financial services projects in 2023, an increase from 76 projects the previous year. As a result, its market share rose from 26% in 2022 to 33% by the end of 2023.
The UK also welcomed 85 new financial services projects in 2023, a 25% increase from the 68 projects recorded in 2022.
As such, the UK market share of new financial services projects went up from 32% in 2022 to 36% in 2023 – the strongest performance in 10 years. However, EY cautioned that the UK and the EU alike will soon face increasing competition for FDI from other players elsewhere in the world.
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