The UK has kept its crown as the top location in Europe for financial services investment, despite Brexit uncertainty causing projects to decline.
In 2017, UK financial services brought in 78 foreign direct investment (FDI) projects, higher than any other country in Europe, although it was down from record levels of 106 the year before.
The findings from EY's UK Attractiveness Report, released today, said financial services investment into Europe enjoyed a 13 per cent rise in 2017, while investment into the UK fell by 26 per cent.
But the big four accountancy firm warned competitors were closing in, as Germany recorded a year-on-year increase of 64 per cent up to 64 projects, while France chalked up an additional 123 per cent increase in projects, with 49.
Omar Ali, EY’s UK financial services leader, said:
It would be easy to use 2017 FS investment numbers to predict the end of the UK’s global dominance in financial services, but the figures just don’t show that. Despite all the challenges, the UK is still the most attractive market for FDI in Europe.
This is due to several factors, many of which are difficult for any other centre in Europe to replicate – our talent, quality of life, time zone, tech infrastructure and robust regulatory and legal systems. But we can’t ignore the drop in investment and forward-looking sentiment – investors are sending a clear message that answers are needed on future trading arrangements, access to skills and the UK’s future approach to the economy.
EY said 94 per cent of financial services investors reckon the UK's quality of life, diversity, culture and language was ensuring it was still the most attractive destination in Europe.
But some raised concern for the future. Nearly half (45 per cent) said loss of access to EU markets could effective the UK's attractiveness, while a third said lower levels of UK economic growth could hit businesses.