Welcome
Bryan Bletso
Head of International
+44 (0)20 7650 3820 +44 (0)7770 795 703 bryan.bletso@irwinmitchell.com
Welcome to the latest in the series of reports from Irwin Mitchell which looks at the latest trends in foreign direct investment (FDI) into the UK.
We publish this latest edition at what is, without doubt, a crucial and potentially exciting time for the UK economy.
The new Labour government has put the growth of the economy as its number one priority, building on the work the previous government had done in this area. It appears to be making positive moves in terms of boosting foreign investment and ensuring it is spread throughout the UK.
Within the first week since the General Election result, new Chancellor, Rachel Reeves, announced a number of far-reaching initiatives. These included the creation of a £7.3 billion National Wealth Fund, to catalyse private sector investment.
It is certainly welcome news, and one of the main findings in this report backs the calls for immediate action. Compiled by leading economic consultancy, Cebr, our report says that the 50 largest cities in UK are making positive strides in relation to investment in skills and infrastructure, but these efforts are being outweighed by economic uncertainty.
As you will see in this report, all but one of the cities examined have seen their overall attractiveness score reduced compared to 2023, and this is primarily due to lower GVA expectations than a year ago.
We will, of course, be monitoring the effectiveness of the new Government’s policies and sharing our insights with a follow-up report and a series of podcasts in the Autumn. In the meantime, I hope this study is of interest and I look forward to receiving your comments.
If you’re an overseas business or private individual looking to invest in the UK, please do get in touch to see how we can help you.
What is FDI?
Foreign direct investment (FDI) refers to cross-border flows where an investor establishes a lasting interest in a foreign subsidiary. For this to reflect a long-term interest, typically 10% or more of the organisation’s voting power must be under the control of the foreign investor. Examples of FDI include Greenfield FDI, where a new establishment is formed, and Mergers & Acquisitions (M&A), which refers to the take over of an existing business. Inward FDI is widely considered to be a key factor in promoting the domestic economy, having the potential to raise productivity, facilitate the transfer of technology and open doors for collaboration, innovation and sustainability.
Methodology
The table below shows the three pillars of investment attractiveness which make up the Index. Each pillar is made up of two or three indicators, sourced via a combination of national datasets and Cebr’s in-house forecasts.
A detailed methodology note on the index construction is outlined in the appendix.