UK still top for foreign direct investment though Germany is "hot on its heels"

General Election - Economy
The short-term attractiveness of the UK does not appear to have been hit following last year’s Brexit vote (Source: Getty)

The UK has retained its status as Europe’s most attractive location for international investment, drawing in a record haul last year.

The UK attracted 1,144 foreign direct investment (FDI) projects last year, an increase of seven per cent on 2015.

Read more: Foreign investments help shareholders as UK dividend growth lags

However, Britain’s share of the European market was diluted in 2016, from 21 per cent to 19 per cent, and a report from EY today warns Germany is “hot on its heels”.

While the short-term attractiveness of the UK does not appear to have been hit following last year’s Brexit vote, investors’ longer-term expectations are deteriorating.

Read more: Scotland retains crown as top UK region for foreign direct investment

“Although the UK’s relative FDI performance in 2016 was not as strong as in recent years, there were no signs of any immediate collapse in investment as a result of the outcome of the EU referendum,” said Steve Varley, EY’s UK chairman.

Scotland has also kept its crown as the top place in the UK for FDI outside London; it now attracts more than one in 50 of all the investment projects available across Europe.

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