Martina Keane reveals that the UK’s financial services features attract global investors

The UK’s finance industry retained its position as a magnet for foreign investment ahead of its European rivals despite a slowdown in activity across the region last year, according to EY (Ernst & Young), a global professional services firm.

The country received foreign investment for 73 finance projects last year, which caused a 32% decline compared to the previous year.

In Germany, which was in second place, deals dropped by 16% to 32. Across Europe, deal volumes decreased by 11%, according to EY’s findings. 

Martina Keane reveals that the UK’s financial services features attract global investors

Reports from sources revealed that investors worldwide favored London as the top European city for foreign investment in financial services in the next 12 months. This is ahead of Frankfurt and Paris, even though Germany was the top choice for the future on a national level. 

Following  Donald Trump’s tariff announcements clouding the future, only 32% were willing to invest in the US, according to a poll. This is compared with 39% for the EU and 44% for the UK.

Martina Keane, EY’s EMEIA Financial Services Chief Operating Officer and the firm’s EMEIA Deputy Regional Managing Partner, commented on the situation.

Keane stated that the UK’s financial services sector is strong and deep. According to her, this feature keeps attracting global investors, especially during tough market conditions.

She also mentioned that the competition for available funding is still intense.

EY’s analysis highlights Europe’s drastic decline in FDI project

Europe experienced a 5% drop in foreign direct investment (FDI) projects year-on-year. In 2024 the continent attracted 5,383 projects, marking the lowest number in nine years. These project numbers were 16% lower than the pre-COVID-19 pandemic and 19% lower than the peak year in 2017, which was 6,653.

Additionally, based on data from EY’s analysis, Europe’s overall FDI project total has dropped for the second consecutive year. This also meant that the continent has had falling FDI numbers for four out of the past seven years.

In leading economies, more than 50% of Europe’s annual FDI project total has historically been allocated to France, the UK, and Germany. However, project numbers decreased significantly in these countries last year due to low economic growth, high energy costs, and competition from other markets, such as Asia and the US.

France struggled with political uncertainty in 2024, rising labor costs, and postponed tax hikes for large businesses, and Germany’s energy prices rose as its manufacturing shrank.

Contrastingly, FDI project totals rose elsewhere in Central, Eastern, and Southern Europe, with Spain experiencing a 15% rise, Poland a 13% rise, and Italy a 5% rise each, though with much smaller numbers compared to the top three ranked countries.

The government focuses on demonstrating that the UK is open for business

Anna Anthony, EY UK & Ireland regional managing partner, highlighted the positivity that the UK still ranks near the top in Europe for investment. However, Anthony

stated that the UK was not immune to the decline in FDI volume felt by other large European nations last year.

According to the regional managing partner, the UK still has a strong investment story to share. She claimed it has done better than Europe in attracting investments in industries like technology and life sciences, creating the most jobs related to FDI, and drawing funds from a wide range of global sources. 

The government is actively working to demonstrate that the UK is open for business by strengthening trade relationships with India and the US. They also focus on sectors they believe will see the most growth and investment under their Industrial Strategy. 

Based on Anthony’s argument, the UK can showcase a stable regulatory and business environment, which could help attract important FDI projects during this global economic uncertainty, leading to increased value, job creation, and prosperity. 

The global economy has suffered because international trade disruptions have made things difficult. How much this has impacted investor appetite this year is yet to be seen.

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