21st June 2024

Better business. Better community

Business Industry and Financial

UK accelerates its lead as Europe’s most attractive destination for financial services investment | EY

Job creation linked to financial services FDI increased throughout Europe in 2023, particularly in the UK, followed by Poland and Portugal. Of the projects that disclosed headcount numbers (both new and existing projects), 12,675 jobs were created through financial services investment projects across Europe in 2023 – an increase of 18% from 10,708 in 2022. In the UK, 5,019 jobs were created in 2023 – a sharp rise of 93% from 2022 (2,603 jobs) – meaning the UK generated 40% of all jobs created in Europe last year. 3,259 jobs were created in Poland, 1,340 in Portugal, 1,243 in France, and 418 in Spain.

Anna Anthony, EY UK Financial Services Managing Partner, comments: “The UK didn’t just maintain its lead as the most attractive European financial services market last year, it extended it significantly. Even through challenging macroeconomic conditions and geopolitical uncertainty, the stability of the UK’s financial services sector has ensured foreign investor confidence remains strong.

“However, competition is fierce – both from European peers and further abroad – and increasing market attractiveness must be a top priority for both industry and government. Efforts to boost attractiveness should build on our strengths and focus on what matters most to investors; including shaping future frameworks to drive innovation, leading on gold-standard regulation, and attracting the best local and international talent.”

London remains the main centre for FDI, with more than double the number of projects than Paris

London remains the leading European city for attracting financial services FDI, securing 81 projects in 2023, up from 46 in 2022 (a 76% increase). London’s total number of financial services projects in 2023 was more than double that of second-placed Paris (31 projects), which saw an annual 11% decline (35 projects in 2022 to 31 projects in 2023). Madrid placed third, also recording a fall from 22 projects in 2022 to 11 projects in 2023. Fourth-placed Milan similarly saw projects fall from 16 in 2022 to seven in 2023.

In terms of securing ‘new’ projects, London attracted the highest number in 2023 (69), followed by Paris (18), then Frankfurt (12), Madrid (10), Amsterdam (8) and Lisbon (8).

However, survey data of investor sentiment finds that Paris is London’s second biggest rival after New York, and investors ranked it above London as the most attractive European city for future financial investment over a three-year horizon.

The US remains Europe’s main source of FS FDI, with the UK the leading recipient

The largest source of financial services investment into Europe in 2023 was again the US, with projects up 15%, from 79 in 2022 to 91 in 2023. This was the highest proportion of US-backed projects in the last decade and represented 28% of all financial projects into Europe. The UK was again the leading recipient of US investment, recording an 81% increase, from 21 projects in 2022 to 38 projects in 2023. Second placed France secured 15 projects from the US in 2023, an increase from 13 projects in 2022.

Omar Ali, EY EMEIA Financial Services Managing Partner, comments: “While FDI in tech and business services sectors fell across Europe last year, it continued to rise in financial services – even amid challenging macroeconomic conditions and geopolitical uncertainty. Foreign investors remain drawn to the trusted capabilities, expertise and skills found in Europe’s major financial centres and place value on the region’s broad business ecosystem that also connects them to leading advisory, legal and tech services. Our future-looking sentiment research finds that investors not only remain confident in Europe’s financial centres today, but that they are looking to increase investment in the region over the next three years – in both established and emerging financial markets.”

The European cities that investors surveyed believe will be the most attractive for financial services foreign investment in the next three years are Paris (40%), London (33%), Barcelona (23%), Zurich and Lisbon (both 20%).

Looking to the future, investors remain confident in the UK and affirm London as most attractive UK region for financial services investment

Further to the European FDI data, a global financial services investor sentiment survey in 2024 examining future investment attractiveness of Europe found that:

  • The UK is seen as the most attractive European country for financial services investment in the coming year (40%), followed by France (30%), Germany, (23%) and Spain (20%).
  • Three in four (75%) investors think the UK will retain or improve its level of financial services attractiveness over the next three years.
  • 57% of investors said they plan to establish or extend financial services operations in the UK over the next year – down from 67% in the 2022 survey.
  • The European cities investors believe will be the most attractive for financial services foreign investment in the next three years are Paris (40%), London (33%) and Barcelona (23%).
  • The global cities identified as London’s biggest rivals for financial services foreign investment in the next three years are New York (38%), Paris (35%), Frankfurt (30%) and Berlin (30%).
  • Investors cite the key areas for future strategic investment as tech and innovation, followed by small and medium sized business support and access to talent.
  • At a regional growth level, investors noted they wanted to see regional grants and incentives for investment, a skilled workforce and access to local business partners and suppliers.


Notes to Editors

‘New’ investment projects represent a new footprint for firms and is a recognised means of assessing a country’s investment dynamism and ability to attract fresh investors.

About the EY Attractiveness Report

The EY Attractiveness Surveys analyse the attractiveness of a particular region or country as an investment destination. The surveys are designed to help businesses make investment decisions and governments remove barriers to growth. A two-step methodology analyses both the reality and perception of FDI in the country or region.

The evaluation of the reality of FDI in the UK is based on the EY European Investment Monitor (EIM), the proprietary EY database.

We define the attractiveness of a location as a combination of image, investors’ confidence and the perception of a country’s or area’s ability to provide the most competitive benefits for FDI.

All field research assessing sentiment on the UK and Europe’s attractiveness was conducted by FT Longitude in February and March 2024 based on a representative panel of 900 international decision-makers, including financial services investors.