In its latest report, the City of London Corporation has reported a significant decrease in foreign direct investment (FDI) in the U.K.’s financial and professional services sector in 2023, amounting to £1 billion ($1.25 billion) in 222 projects. This decline comes following the U.K’s £2 billion of inward investment in the sector in 2022. Despite the decline, the U.K. remains Europe’s most popular destination for FDI in financial and professional services.
In the last five years, London has remained the world’s top global financial center for financial and professional services. With a total of 697 projects from 2019 to 2023, London remains ahead of competitors including Singapore, Paris, New York and Hong Kong.
Despite the U.K.’s challenging macroeconomic environment, financial and professional services continue to attract FDI with the U.S. and Western Europe being the largest investors. The U.S. is the U.K.’s largest source of FDI, making up over 40 percent of foreign investments in 2023.
New analysis shows that foreign direct investment into the UK’s financial & professional services remains strong as the UK continues to be Europe's most popular destination for #investment. Read more: https://t.co/dCi51Hnmhn pic.twitter.com/j09QIkS845
— City of London (@cityoflondon) April 30, 2024
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Notably, investment management firms were the main drivers behind inward investment projects, comprising £227 million or a third of all FDI in the U.K. last year.
In addition to asset management, the U.K. emerged as a fintech and technology hub with the sector attracting almost 25 percent of total FDI. Among the top 10 projects by investment value in 2023, fintech and technology solutions were the second largest in terms of size with investments totaling £94 million.
