Foreign investors rush to UK

More than a thousand FDI projects landed in the Britain last year, according to EY’s annual attractiveness survey.

This is the largest number of projects secured since records began two decades ago. The survey showed that the UK was the leading recipient of FDI in 2015, with a fifth of all European projects heading to Britain last year, putting it ahead of Germany, France and Spain. reports The Telegraph.

The surge spurred a 35pc increase in FDI associated employment, to more than 42,000.

Despite the increase, the survey also revealed the “largest ever decline in investor perceptions of the UK recorded”.

The survey of 440 international companies showed that just over a third of respondents expected the UK’s attractiveness to foreign investors to improve over the next three years, compared with 54pc last year.

This represents the lowest score since 2010, at the start of the Greek debt crisis.

Steve Varley, EY chairman, described the UK’s FDI performance in 2015 as “nothing short of stellar”.

He said a 172pc surge in the number of investors locating their headquarters in the UK and a jump in research and development projects reflected confidence in government policy.

“Against a positive backdrop, there has certainly been a marked deterioration in investor perceptions of the UK on a scale we have not witnessed before,” he added.

While some of the dip was due to concerns about labour costs, airport capacity and high property prices, Mr Varley said these factors alone could not explain the extent of the decline in future perceptions.

“It is possible that the upcoming referendum on the UK’s membership of the EU is also weighing on investors’ minds. It is certainly the case that EY’s research demonstrates that any deterioration in the terms on which UK-based businesses can access the European Single Market, would be a concern for investors,” he said.

The EU is Britain’s biggest investment partner, representing either the destination or source for more than two fifths of the UK’s cross-border investments, according to the Bank of England.

Foreign investors own £10.6 trillion of UK assets – or the equivalent of more than five times UK GDP, its research shows.