London retains top spot for FDI attractiveness

London has retained its number one position as the most attractive location in the UK for foreign direct investment (FDI) attractiveness, according to a new study

Produced by law firm Irwin Mitchell, the Investment Attractiveness Index has been compiled by a team of experts at the Centre for Economics and Business Research, who have analysed the UK’s 50 largest cities according to eight indicators related to growth potential, local Infrastructure, and local skills.

The report says Inner London remains in first place although its overall attractiveness score of 72 is 7.8 points lower than the previous – mainly caused by lower predicted GVA growth in 2024 compared to 2023.

Well-respected

Irwin Mitchell’s report says London ranks exceptionally high in the skills category, with a large, economically active population and numerous well-respected universities. Excluding Brighton, London also leads in the Growth Potential category, ranking first for New Enterprises per 10,000 people.

“driving innovation and creating jobs, local and national governments should work together to make improving attractiveness to investment a key priority over the coming years.

Bryan Bletso (pictured), partner and head of International at Irwin Mitchell, said: “The capital ranks exceptionally high in the local skills pillar, with a large, economically active population and numerous well-respected universities, securing the top spot along with Inner and Outer London in these indicators.”

Pushpin Singh, senior economist at Cebr, said that with FDI remaining crucial for economic growth, “driving innovation and creating jobs, local and national governments should work together to make improving attractiveness to investment a key priority over the coming years.”

FDI refers to investments made by foreign investors in a company located in a different country. It can take the form of greenfield investments or mergers and acquisitions. In 2021, the UK’s inward FDI position was £2,002 billion, slightly higher than the previous year’s £1,919 billion.

EY’s 2024 UK Attractiveness Survey recorded 985 FDI projects in 2023, up six per cent from 2022. It also revealed the UK recorded an average 60.9 jobs per FDI project.