UK dominates European investment appeal despite drop in activity
The UK has continued to storm ahead of its European rivals as the region’s most attractive destination for financial services investment, despite a sharp drop in activity.
The UK recorded 73 foreign direct investment (FDI) projects in 2024, a steep 32 per cent drop from 108 the previous year, according to EY’s latest Attractiveness Survey for Financial Services.
But the figure still dominates its European counterparts, with Germany scoring second at 32, down from 38, and France third at 30, down from 39.
This meant the UK made up 25 per cent of all European financial services FDI projects in 2024, which refer to foreign-backed business initiatives such as setting up or expanding operations in a country.
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 last year.”
Keane said future successes depend on “not just maintaining, but growing the attractiveness of the UK’s financial services sector on the global stage”.
She said this included progressive regulation, innovation and continued establishment of key international trade relationships.
London’s threat from Paris looms
Meanwhile, EY’s research showed London clinged onto its leading European city status for financial services FDI, but Paris was hot on its heels.
London projects were slashed more than 50 per cent to 39, whereas Paris dipped to 23 from 31.
The global cities dubbed London’s biggest rival for financial services foreign investment included New York at 59 per cent, Paris at 41 per cent and Frankfurt at 43 per cent.
Last month, Morning Wire revealed London had lost its European tech crown to Paris, sounding the alarm on concerns over the competitiveness of the UK’s biggest city.
The French capital was named as the only non-US city in the world’s top five global ecosystems, according to Dealroom’s 2025 global tech ecosystem index.
Keane said: “Competition is fierce, and while the UK industry is a clear leader, we cannot ignore the fact that investment levels have declined over the last year.”