FDI and the UK economy
The latest data from the Department of Business and Trade (DBT) shows that 1,375 FDI projects were recorded in the UK in the 2024/25 financial year. This represents an 11.6% decrease from the 1,555 projects recorded in the financial year prior, representing the second consecutive year of decline on the overall measure.
Figure 1: Number of FDI projects by financial year, broken down by type of investor (LHS) and total jobs facilitated by current FDI projects (RHS)
The headline FDI trend conceals several important sub-trends:
- Projects from investors entering the UK market for the first time have declined for two consecutive years, falling from 711 in 2022/23 to 611 in 2023/24, and 553 in 2024/25; an overall drop of over 22%. This mirrors the broader downward trajectory in overall project numbers.
- There has been a sharp fall in projects from existing investors. After holding steady at 943 in 2022/23 and 944 in 2023/24, these dropped to 822 in 2024/25 – a 13% dip – suggesting a weakening appetite even among firms already established in the UK.
The weakening FDI pipeline is also reflected in the accompanying jobs figures. Total employment associated with inward investment has fallen for three consecutive years, from 86,195 in 2022/23 to 79,550 in 2024/25 (-8%).
Within this, the number of new jobs created has seen the steepest decline, down by 14%: from almost 80,000 in 2022/23, to just over 69,000 in 2024/25.
Examining the jurisdictions investing into the UK also offers insight into recent trends. The USA remains the biggest source of inward investment by far with 329 projects (24% of the total). This is followed by India with 106 projects (8%), Germany with 83 projects (6%), France with 68 projects (5%), and Sweden with 58 projects (4%).
These trends are playing out against the backdrop of a UK economy marked by sluggish growth, elevated borrowing costs, and a subdued investment climate. More recently, increases in payroll taxes introduced in April 2025 have added to input costs, further weighing on both new and repeat investor sentiment.
Figure 2: Top source countries for inward investment into the UK, 2024/25
