For all the gloom around the impact of Brexit on the City of London, the latest survey of Europe’s top destinations for foreign direct investment in financial services is a reminder of the UK’s continuing heft in the sector.
Britain landed 76 financial service projects in 2022, up 17% from the previous year despite the economic downturn and political instability in Westminster, according to an EY analysis. It means the UK secured 26% of all European financial services FDI projects.
The rise was thanks to an increase in American investment, with the UK home to 21 US-backed projects — up a quarter year-on-year.
Even in challenging times, investors see the UK “as the most attractive European financial services market,” said Anna Anthony, UK financial services managing partner at EY. The industry needs to work with the government to continue to boost the UK’s appeals through investment in programs like social mobility and upskilling local talent.
France, which recorded a 25% fall in the number of projects in 2022, came second with 45. Germany and Spain followed with 31 each.
The EY results come even as a growing chorus of executives criticize the UK’s business environment. Last month, Revolut’s co-founders launched a blistering attack on the UK as a place to run a business, saying they wouldn’t consider listing in London.
By contrast, an accompanying survey by EY of executives across banking, insurance, wealth and asset management and fintech found they expected the UK to retain or improve its level of financial services attractiveness over the next three years.
Other Insights From the Report:
- 2,603 jobs were created through financial services investment projects in the UK, a rise of 4% from 2021
- Within the UK, London remains the favored destination for financial services operations, followed by Scotland and Yorkshire & Humber
- 69% of investors said they plan to establish or extend financial services operations in the UK over the next year
Photograph: Skyscrapers and commercial buildings beyond Tower Bridge, on the skyline of the City of London, UK, on Monday, March 6, 2023. Photo credit: Jason Alden/Bloomberg
Topics Europe
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