The UK remains Europe’s top destination for global investors, and inward investment projects into the UK rose by 15% last year, increasing its market share.
The 799 projects were the highest number ever secured by the UK, according to professional services firm EY's annual UK Attractiveness Survey.
Overall, the European market grew by just 4%, meaning the UK secured one-fifth of all European projects, close to its record high over the past decade. Its performance saw the UK extend its lead over second-placed Germany as a foreign direct investment (FDI) destination, as both countries pulled away from the remainder of Europe.
The UK has also moved from eighth to fifth in the worldwide ranking of countries investors regard as attractive for FDI over the next three years – its highest ever position – overtaking Germany for the first time. Only China, the United States, India and Brazil are ahead of the UK.
According to the research, the UK was the clear leader in attracting projects in the knowledge industries. Software investments surged by more than 50%, meaning the UK secured more than a third of all projects in what is now Europe's largest FDI sector.
The UK continued to be the number one recipient of US investment into Europe, receiving 27% of US projects, an increase of 1% on the previous year's figure. The UK is also the top European destination for investors from another three of the top 10 countries of FDI origin – France, Japan and the Netherlands.
On the other hand, Germany has built up an especially strong market share of Chinese investments, meaning its share of Chinese-originated projects is more than double that of the UK at 19%.
Steve Varley, EY UK & Ireland chairman and managing partner, said: “The UK's performance was nothing short of stellar and was achieved against the backdrop of more modest increases across Europe. The message that the UK is open for business is being received loud and clear by international investors, but as the global economy evolves, the UK must continue to respond in order to stay ahead.
“With intra-European FDI increasing and almost two-thirds of our survey respondents identifying the UK as a gateway to Europe, clarification on the UK's relationship with the wider continent is essential.”
Sally Percy is editor of The Treasurer