Foreign investment in the UK collapses 35 per cent

Foreign direct investment (FDI) into the UK plunged to its lowest level for seven years, according to a new report by the United Nations (UN).

The British economy saw FDI of just £28bn last year, a massive 35 per cent drop from 2009.

Fears over the UK’s fragile recovery have pushed it from third place on the global league table to seventh.

The UN report considers foreign investment in areas including infrastructure, property, technology and takeover activity.

UK outflows saw an even more pronounced drop, with levels dropping 75 per cent to just £6.7bn.

Global FDI rose by five per cent last year and should hit pre-crisis levels in 2011. It totalled $1.24 trillion (£760bn) in 2010 and should hit $1.6 trillion this year, advancing to $1.7 trillion in 2012 and $1.9 trillion in 2013.

The big winner was the US, the world’s top FDI destination, where a 50 per cent collapse in FDI in 2009 was offset by a 49 per cent bounce in 2010.

Flows to China, the second biggest FDI recipient, rose by 11 per cent in 2010 to $105.7bn. Vietnam and Indonesia also rose up the ranks.