As markets and economies across the globe start to recover from the economic effects of COVID-19, investor sentiment suggests that the UK is expected to continue outperforming the rest of Europe in attracting financial services investment. In a survey of global investors, the UK came out as the European country with the most investment friendly COVID-19 recovery plans (backed by 48% of respondents) and the most attractive for financial services investment (scoring 50%). Germany came second on both these metrics with 38% and 33% respectively, while France and Switzerland came in joint third place on both with 21% each. At a city level, London continues to be seen as Europe’s most attractive destination for financial services FDI (backed by 44% of respondents) followed by Stockholm (19%) and Amsterdam (17%). The UK has consistently been the number one location for international financial services investment since EY started tracking FDI levels and market attractiveness over twenty years ago. While its lead may have narrowed in 2020, most likely only short-term in response to pandemic-related business disruption and Brexit, investor sentiment suggests that the UK is looking to a strong future, and will continue to outperform the rest of Europe in attracting post-COVID 19 financial services investments. Investors have consistently been drawn to the strength and resilience of the city, its deep capital markets, gold-plated regulatory system and for the innovation and talent it offers. Despite the challenges of the last few years, the evidence points to this not only continuing, but growing in strength, ensuring the UK remains a world leading financial services centre.
UK retained its leading position for international investment, securing 19.6% of all financial services FDI into Europe, although this was down from 26.7% in 2019. France, which had ranked fourth in 2019, leapfrogged into second place, reducing the gap with the UK to just seven projects. Germany, which had been second in 2019 with 43 projects, dropped to third place in 2020, with 37 projects. Spain, which took the third spot in 2019 with 40 projects, fell back to fourth place in 2020 with 31 projects. London remains the leading UK and European city for attracting FDI for financial services, securing 38 projects. However, this was down 43% from the 67 financial services projects recorded in 2019. Paris and Madrid shared second place with 21 financial services projects each in 2020; down from 29 and 24 projects respectively in 2019. Berlin took the fourth spot with 11 financial services projects in 2020, overtaking Dublin which recorded nine. As for which regions investors think will be the most attractive for future financial services investment into the UK, London came top backed by 31% of respondents with Scotland second with 15%.