The United Kingdom has retained its leading position in Europe for foreign direct investment (FDI) in the financial services sector – even amid a challenging year that saw a 32% drop in project numbers.

According to the latest report from EY, the UK managed to stay ahead of its continental rivals thanks to the strength of its financial sector, investor confidence, and a favorable business environment.

While investment activity across Europe slowed down, London remained the top choice for investors, outperforming cities like Frankfurt and Paris. In 2023, the UK attracted 73 financial investment projects. Germany came second with only 32 projects, down 16% year-over-year. Overall, Europe saw an 11% decline in financial sector FDI.

Investors Value the UK’s Stability, Sector Strength, and Pro-Business Stance

The UK's financial industry continues to appeal to global investors thanks to its maturity, resilience, and supportive regulation.

Martina Keane, EY’s COO for Financial Services in the EMEIA region, highlighted the UK’s consistent ability to attract investment, even in turbulent economic times.

“There’s intense competition for capital, but the UK still earns global trust. It’s a developed, stable market with deep roots,” Keane said.

Investor sentiment surveys support that view: 44% of respondents were willing to invest in the UK, compared to 39% for the EU and just 32% for the United States — following uncertainty triggered by Donald Trump’s tariff announcements.

Europe’s FDI Decline Continues for a Second Year

EY’s analysis paints a broader picture of decline across the continent. In 2024, Europe recorded just 5,383 FDI projects, the lowest figure in nine years. That’s a 19% drop compared to 2017 and 16% below pre-COVID levels.

Historically, over half of European FDI has gone to France, Germany, and the UK. But last year, these major economies were hit hard — France struggled with political uncertainty and tax reform delays, while Germany saw rising energy costs and declining industrial output.

Southern and Eastern Europe Show Modest Growth from a Low Base

While Western Europe faltered, some parts of Central, Eastern, and Southern Europe saw modest growth.

Spain reported a 15% increase in FDI projects, Poland 13%, and Italy 5%.

However, their overall project volumes remain significantly lower than those of the top three destinations.

UK Government Focuses on Showing It’s Open for Business

Anna Anthony, EY’s Managing Partner for UK & Ireland, noted that despite the drop, the UK still presents a strong investment story. She pointed to strong performance in tech and life sciences, job creation tied to FDI, and diversified global capital sources.

The UK government is actively working to reinforce its openness to international business through strengthened trade ties with countries like India and the US. It also targets industries expected to see the most growth under its industrial strategy.

Anthony emphasized the UK’s regulatory stability and pro-business climate, suggesting it may help attract high-value FDI projects in uncertain global times — bringing capital, jobs, and economic resilience.

Looking Ahead: Will Investor Confidence Hold?

The global economy continues to face disruptions in trade and rising uncertainty. Whether investor interest can hold up in 2025 remains to be seen.

For now, though, the UK remains a key player on Europe’s investment map — a position earned through resilience and adaptability in difficult times.



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