Britain remains by far and away the most attractive country in Europe for financial services investment, despite foreign direct investment (FDI) projects falling by more than 10 per cent in 2019.
According to EY research, the UK recorded more than double the number of projects of any other European country, with 99 recorded last year.
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That was a drop of 11 per cent on the 112 recorded the year before, a slightly softer drop than the Europe-wide 13 per cent fall in activity.
The slide comes after Europe saw a record number of Financial Services FDI projects in 2018, driven by firms opening new offices or restructuring in preparation for Brexit.
London alone recorded 67 FDI projects last year, more than any one European country as a whole. Germany came in second place, with 43 projects.
Looking ahead, an EY survey of investors suggested that the UK is expected to continue outperforming the rest of Europe in financial services investment after the Covid-19 pandemic.
Opinions were mixed, but forty per cent of investors said they thought the UK would be more attractive for Financial Services FDI after Covid-19, compared to just eight per cent who believed that Europe as a whole would be more attractive after the crisis.
Omar Ali, UK financial services managing partner at EY, said: “The UK has again performed strongly on Financial Services FDI and, crucially, should remain in a good position to continue attracting investment this year, despite the challenges posed by Covid-19 and a weaker economy.
“2018 saw record Financial Services FDI activity in Europe driven by the industry preparing for Brexit, so it was perhaps unsurprising that overall FDI projects in Europe and the UK dropped last year.
“However, 2019 levels were still the third strongest this decade and the UK has extended its lead over the rest of Europe despite Brexit, which is impressive.
“Financial Services remains one of the most important sectors supporting and driving economic growth in the UK, and it’s good to see that, thanks to the depth and breadth of our capital markets and the faith people have in our regulatory system, investors have confidence in the sector’s ongoing strength and resiliency.”