Greater London only English region to see FDI growth in 2025

EY UK Attractiveness Survey - June 2026

Greater London (279 projects) and Scotland (108 projects) maintained their positions as the UK’s first and second-best performing destinations for investment, with the West Midlands (68 projects) in third position. Greater London attracted more FDI projects than any other region in Europe, whilst Scotland ranked as the eighth-best performing region in Europe.

Overall, the UK secured the second‑highest number of FDI projects in Europe in 2025, with 730 projects recorded. This represents a 14% decrease from 2024, when 853 projects were announced. France ranked first for the seventh consecutive year with 852 projects, despite a year‑on‑year decline of 17%, while Germany placed third with 548 projects, down 10% on the previous year.

Investor sentiment points to stronger long-term outlook for UK

EY’s investor sentiment survey, part of the UK Attractiveness Survey, draws on interviews with 360 international investment decision-makers conducted in March and April 2026.

Despite the subdued near-term outlook for FDI into the UK, prospects over the longer-term appear brighter, with more than half (57%) of global investors surveyed saying they expect the UK’s investment attractiveness to increase over the next three years. Only the US (60%) and France (58%) ranked higher on this measure. Meanwhile, 19% of investors expect the UK’s attractiveness to ‘significantly increase’ over the next three years, which was only surpassed by the US (22%).

This balance between short-term setbacks and longer-term optimism is also reflected in the outlook for global cities. Global investors ranked London as the most attractive destination for FDI over the next three years, selected by 46% of respondents, ahead of New York (38%) and Paris and Singapore (both 33%). However, for 2026 alone, investors expect Paris to lead in Europe, with London ranked second.

Anna Anthony, EY UK & Ireland Regional Managing Partner, said: “Despite an overall decline in FDI project numbers amid a challenging economic and geopolitical backdrop, investor sentiment suggests the UK - particularly London - remains a strong contender in a highly competitive global market. While the UK is well positioned to attract long-term capital and compete with leading destinations such as the US and France, the priority now is to convert this into sustained investment that drives growth, supports innovation and strengthens economic momentum across all regions.

“Unlocking this potential will require close collaboration between business and policymakers. The Government’s 10-year Industrial Strategy is an important signal of intent and provides a framework to strengthen the UK’s position as a forward-looking, innovation-driven economy. To fully realise this ambition, the focus must now shift to creating the conditions that enable investment to scale such as reinforcing regulatory certainty, supporting key growth sectors and ensuring all parts of the UK can attract and retain capital. Clarity, stability and partnership will be essential to converting positive investor sentiment into lasting economic impact.”

Majority of UK regions saw FDI fall in 2025

EY analysis reveals that 2025 was a challenging year for inward investment for much of the country.

Significant year‑on‑year declines were recorded in the West Midlands (‑21%), North West (‑41%), South East (‑32%), East Midlands (‑6%), Yorkshire and the Humber (‑46%), North East (‑48%) and the East of England (‑41%). Project numbers were flat in the South West, while London (5%), Wales (56%) and Northern Ireland (65%) recorded increases.

FDI projects fell across the North of England regions, declining collectively by 44% to 101 projects in 2025, down from 180 in 2024. The North West remained the fourth‑best performing UK region with 51 projects, despite a 41% decline, while Yorkshire and the Humber ranked eighth with 28 projects and the North East placed 11th with 22 projects.

Greater London accounted for 38% of all UK FDI projects in 2025, up from 31% the previous year.

Beyond London, there were some promising signs for regional UK cities which continued to perform well. Manchester remained the UK’s most successful city for FDI outside of the capital, despite seeing overall projects fall from 44 to 31 year-on-year and it was also ranked by investors among Europe’s top 15 most attractive cities.

Meanwhile, Edinburgh’s project count rose 25% year-on-year to 30, with Birmingham (26 projects) and Glasgow (23 projects) making up the remainder of the UK’s top five destinations for FDI.

More than half (55%) of global investors surveyed said they intend to invest in the UK over the next year. Of that group, 51% intend to invest in London, followed by Scotland (33%), the South West (20%), the West Midlands (19%), Wales (16%) and the North West (15%).

London (51%), Edinburgh (27%) and Birmingham (18%) emerged as the most popular UK cities among investors planning to establish or expand operations over the next year.

Peter Arnold, EY UK Chief Economist, said: “While London outperformed the broader European trend in 2025 and remains a highly attractive global investment hub, FDI activity across much of the UK was more subdued. No English region outside the capital recorded growth, and while Wales and Northern Ireland saw year-on-year increases, their overall totals remain significantly below the UK’s traditional investment hubs. This widening gap between London and the rest of the country risks reinforcing long-standing regional disparities.

“Against a backdrop of more cautious global investment flows, the UK must sharpen its focus on where it can compete most effectively and deliver long-term value. Addressing structural barriers - including high energy and labour costs - will be critical to better insulating the economy from ongoing uncertainty. Strengths in sectors such as technology, professional services and financial services remain a clear advantage, but this needs to be complemented by stronger performance in high-value, productivity-enhancing areas such as advanced manufacturing and life sciences. Strengthening regional investment propositions through improved connectivity, workforce capability and a stronger pipeline of investable projects will be essential to translating investor interest into sustained, nationwide growth.”

London continues to attract lion’s share of projects in the UK’s leading FDI sectors

Software and IT Services was the UK’s leading sector for inward investment in 2025 with 155 projects secured nationwide, narrowly ahead of Business and Professional Services (153 projects) and Financial Services (85 projects). This was followed by the Transportation Manufacturers and Suppliers, and Machinery and Equipment sectors (both 45 projects).

Greater London accounted for more than half (55%) of the UK’s Software and IT Services FDI projects with a total of 85. The region also accounted for more than two-thirds of the country’s Financial Services projects with a total of 59, and just under half (48%) of all Business and Professional Services projects with a total of 73.

The West Midlands was the leading region for Transportation, Manufacturers and Suppliers, securing a quarter (24%) of all UK projects in that sector in 2025. 

Investors identify the UK’s competitive strengths and areas of weakness

When asked to assess the UK’s competitiveness as an investment destination, investors highlighted a number of enduring structural strengths. The availability and quality of the workforce, the UK’s strong innovation ecosystem and research and development capabilities, and access to finance were most frequently cited as the country’s leading advantages compared with competitor markets.

However, investors also pointed to rising cost pressures as a significant challenge. High energy prices, elevated labour costs and concerns around tax competitiveness were identified as the UK’s key disadvantages relative to other locations. More than a third of respondents (38%) said energy costs were the single biggest factor detracting from the UK’s investment appeal.

Looking ahead, macroeconomic conditions emerged as the most significant risk to the UK’s attractiveness over the next three years. Factors including slow economic growth, high interest rates and elevated public debt were ranked as the top risk by 16% of respondents, with 41% including them among their top three concerns. The rising costs of doing business in the UK, including energy prices, were cited as the most prominent risk by 12% of respondents, followed by tariffs and other barriers to trade (10%) and geopolitical tensions or conflict (9%).