Foreign investment in the UK declined last year as funding from the US slipped, new data shows, while the Government is ramping up efforts to attract more overseas spending.
The UK secured fewer investment projects than France for the fifth year in a row, according to EY’s annual UK attractiveness survey.
The number of foreign direct investment (FDI) projects totalled 853 in 2024, down 13% on 2023’s total.
It was also behind the 1,025 secured by France during the year, but ahead of Germany’s 608.
FDI projects refer to funding from overseas that helps businesses create new facilities or jobs.
The technology sector attracted the most investment in the UK, followed by transport manufacturers which include carmakers and aerospace firms.
Big projects last year including India-based technology giant Infosys opening a new artificial intelligence (AI) lab in London, in partnership with the University of Cambridge.
Investment across Europe fell by 5% over 2024, marking the second consecutive year of decline, following a more pronounced dip in internationally-funded projects in France, the UK, and Germany.
This partly reflects low economic growth, high energy prices, and competition from other markets such as Asia and the US impacting investment, according to EY.
US spending on projects fell by 11% in Europe and 7% in the UK, helping drag on the overall total.
Meanwhile, the UK secured half of all Indian funding into projects in Europe.
The study comes hot off the heels of the UK securing a new trade deal with India, which slashed tariffs on goods exports and introduced tax exemptions that will make it easier for some Indian professionals to work in the country.
The Government has also been accelerating efforts to boost investment into the UK in a bid to stimulate economic growth.
Earlier this week, Chancellor Rachel Reeves welcomed a commitment by pension funds to invest tens of billions in British infrastructure projects and businesses.
Peter Arnold, EY UK’s chief economist, said: “Economic growth across Europe has been relatively modest in recent years, which appears to be driving investors towards more competitive global destinations such as Asia and the US
“Global uncertainty makes it difficult to predict how investment numbers will change this year, but the UK does have some strong fundamentals that could set it apart.
“The UK tends to attract FDI from a more diverse range of countries outside Europe,” he said, adding: “Rapidly expanding economies like India are also becoming increasingly important sources of investment for the UK in key sectors like technology.”
