UK retains top spot for financial services investment
22 Jun 2020
The UK has maintained its 20-year record as Europe’s most attractive location for international investment into financial services, attracting double the number of projects compared to its closest competitor, Germany, according to research by EY
22 Jun 2020
The firm said UK project numbers were down 11.6% from the year before (a drop of 13 projects), while financial services foreign direct investment (FDI) across the whole of Europe fell by 12.6% from 2018, a year which saw record levels of activity as a result of preparations for Brexit.
The UK recorded 99 projects in 2019, more than double the projects of Germany, which came in second place with 43. The German total was down from 81 projects recorded in 2018.
France, which has ranked third for the last five years, is now fourth behind Spain. France recorded 38 financial services projects in 2019, compared to 52 the previous year, while Spain recorded 40 projects in 2019, up from 22 in 2018 and six projects in 2017.
London remains the dominant European city for attracting FDI for financial services with 67 projects, followed by Paris (29 projects), while Madrid is third with 24 projects. Dublin attracted 23 projects and Frankfurt, 21 projects.
The largest source of financial services investment into Europe in 2019 was again the US, which accounted for 27% of all FDI – up slightly from 24% in 2018. The US also accounted for almost a third (32%) of all UK financial services FDI. The largest investment projects in the UK were also from the US.
Looking ahead, EY’s study suggests that the UK is expected to continue outperforming the rest of Europe in attracting post-pandemic financial services investment, with 40% of investors believing the UK will be more attractive, compared to just 8% who favour Europe as a whole.
Omar Ali, UK financial services managing partner at EY, said: ‘London’s dominance as the preeminent European financial centre remains unrivalled, and it’s also very encouraging to see other parts of the UK - like Scotland and Leeds - attract significant investment and create thousands of jobs.
‘While it’s unclear at this early stage how future projects will be impacted by the pandemic, investor sentiment from April this year suggests UK financial services is in a strong position to adapt to the changes and continue to be a leading destination for overseas investment.’