The UK bounces back from pandemic with record amount of foreign investment in financial services
New figures published today 4 April by the City of London Corporation, show that in 2022 the UK attracted 263 financial and professional services (FPS) projects valued at £2bn, the highest amount of investment in four years and more than any other country in Europe.
The new study also revealed that London continues to hold the top spot in attracting foreign direct investment (FDI) in FPS, attracting 779 projects over the past five years – well clear of Dubai (592 projects), Singapore (586), New York (424) and Paris (332).
The Covid-19 pandemic had an adverse effect on global investment, causing the number of FDI projects in finance and insurance to drop by 30% between 2019 and 2020 globally. While the UK was affected by the pandemic it saw a strong recovery in 2022 with FPS investors in the UK engaged in bigger projects on average, creating more jobs and involving larger amounts of capital investment per project.
Between 2018 and 2022, the UK attracted investment from 65 countries over the world – the highest among all financial centres. The US was the largest investor into the UK’s FPS followed by Switzerland and Germany. In 2022, although North America remained the UK’s largest source of FPS investment there was a strong rebound of investment from Europe which increased by 54% from the previous year.
Investment Management firms have become the largest source of financial services FDI projects in the UK, accounting for a third of all projects, demonstrating the UK’s appeal as a global investment hub. The UK serves clients all over the world with 46% of UK assets managed on behalf of overseas clients.
Lord Mayor of the City of London, Nicholas Lyons, said:
“Despite the global challenges facing the economy, the UK’s financial and professional services sector has proven resilient. London is the world’s most international and connected financial centre, providing unrivalled access to global markets.
“The UK’s offer to global investors continues to go from strength to strength due to its unique combination of time zone, language, legal system, global talent, and financial services ecosystem.”
Policy Chairman at the City of London Corporation, Chris Hayward, said:
“It comes as no surprise that London continues to lead the world as the top destination for investment in financial and professional services. The UK is a magnet to financial institutions as well as global institutional investors.
“It is vital that we continue to build on this success. We must future-proof the sector to ensure we remain globally competitive.”
The research is available here: https://www.theglobalcity.uk/resources/foreign-direct-investment
Notes to editors
About the City of London Corporation
The City of London Corporation is the governing body of the Square Mile dedicated to a vibrant and thriving City, supporting a diverse and sustainable London within a globally-successful UK. www.cityoflondon.gov.uk
About the research
This publication was produced by the City of London Corporation using data provided by FDI Markets, a service from The Financial Times Limited, accessed in February 2023. In this analysis foreign direct investment refers to cross-border investments from one country to another either through setting up a new entity or expanding the operations in the investment destination. Franchises and M&A activities are excluded. The methodology used is different from published statistics from the Office of National Statistics and the Department for Business and Trade.